China can test digital yuan with foreign visitors at the Beijing Olympics

BOAO, China – China is trying to make it possible for foreign athletes and visitors to use its digital currency during the 2022 Winter Olympics in Beijing, a top central bank official said on Sunday.

It could be the first test of China’s digital currency with international users.

Li Bo, deputy governor of the People’s Bank of China (PBOC), also said that the purpose of the digital yuan or e-CNY (electronic Chinese yuan) is not to replace the US dollar’s dominance on the international stage.

For the upcoming Winter Olympics in Beijing, we tried to make e-CNY available not only to domestic users, but also to international athletes and similar visitors.

Li Bo

Deputy Governor, People’s Bank of China

The PBOC began researching the digital yuan in 2014 and has recently launched a number of pilot projects in China that allow residents of cities such as Shenzhen and Beijing to test the currency with retailers. The e-CNY aims to replace cash and coins in circulation and boost cashless payments in China. It is not a cryptocurrency and not designed to be bitcoin.

“For the upcoming Beijing Winter Olympics, we tried to make e-CNY available not only to domestic users, but also to international athletes and similar attendees,” Li said during a CNBC-led panel at the Boao Forum for Asia on the island. . from Hainan.

Li said China’s central bank will include “more scenarios and more cities” to test the digital yuan.

The deputy governor said there is no timeline yet for a nationwide rollout of the digital yuan, but that the PBOC needs to expand the scope of its pilot projects and “strengthen” the technology infrastructure that supports the digital currency.

Challenge for US dollar?

Several commentators have suggested that China’s digital yuan could be a way to internationalize the renminbi and also challenge the US dollar as the world’s reserve currency. Much of the international trade takes place in US dollars.

But Li reiterated that the PBOC is targeting the domestic use of the digital currency.

“Before renminbi internationalization, we have often said that it is a natural process and that our goal is not to replace (the) US dollar or any other international currency,” said Li. “I think our goal is to empower the market and facilitate international trade and investment.”

A digital Chinese currency red packet can be seen on a mobile phone in an arranged photo as the city of Chengdu begins to distribute 200,000 E-CNY ‘red packets’ worth 40 million yuan in Yichang, Hubei province on February 24, 2021. China.

VCG | Visual China Group | Getty Images

However, the PBOC is working with other central banks – including those from Thailand, the United Arab Emirates and Hong Kong – to investigate the use of the digital yuan in cross-border trade.

“Our focus again is to establish a very solid domestic e-CNY first and build a healthy ecosystem. At the same time, we will work with our international partners. Hopefully we have a long-term cross-border solution. Also,” Li said.