China’s digital yuan will be the currency of choice at the Beijing Winter Olympics, despite calls for athletes to avoid it
When Beijing hosts the Winter Olympics starting Feb. 4, athletes, staff, and other visitors will have just three payment options for shopping in the city’s COVID-era Olympic Village: cash, Visa, and one of the world’s first central bank digital currencies, the digital yuan.
“The Olympics has always been scheduled by the People’s Bank of China as the global coming out party for the digital yuan,” says Richard Turrin, author of Cashless: China’s Digital Currency Revolution. And even though COVID has put a damper on that party with a spectator ban, Turrin says, the PBOC will proceed with the digital yuan’s unveiling as planned.
The PBOC, China’s central bank, reportedly has been developing its digital currency for the past eight years and began rolling it out in pilot zones in April 2020. According to officials, 140 million users in China had registered for digital yuan accounts as of November and have collectively made $9.7 billion worth of transactions.
The amount users have spent in digital yuan, also known as e-CNY, is tiny compared with the trillions in dollars processed annually by China’s leading private digital payment firms, Alipay and WeChat Pay. But neither of the giants’ mobile payment platforms will be available in the Olympic Village.
Instead, foreign visitors will be able to access money-changing vending machines where foreign currency can be converted into digital yuan and loaded onto a temporary debit card. The visitor can then use the card to make contactless transactions throughout the village.
For many visitors, the digital yuan’s interface will be familiar. The system works like other prepaid cards, such as a travel card for riding a subway or a ski pass. The PBOC has also designed other wearables that can be loaded with e-CNY—watches, Olympic badges, and ski gloves—to make the currency more appealing.
“It’s a key task and challenge to make sure foreign visitors will have a good experience [with the digital yuan],” the Bank of China (BOC)—a partner of the Winter Olympics that’s not to be confused with the central bank—said in a statement. Ensuring foreigners have a “good experience” with the digital yuan could resolve a long-standing problem in China: that tourists are largely excluded from the country’s cashless society.
Payments have become a major point of friction for travelers to China ever since mobile payments, led by Alipay and WeChat, took off years ago and supplanted cash. Until recently, neither Alipay nor WeChat let foreign users open payment accounts, and because the mobile payment systems had become so ubiquitous across China, travelers, who often carry cash, were sometimes left without ways to pay for goods and services.
Cash will be accepted in the Olympic Village, but the ease of using a prepaid swipe card will likely entice many visitors to try the digital yuan. Turrin notes that even though Visa payments are accepted in the Olympic Village, too—because the payments brand is a sponsor of the Olympic Games—using a preloaded e-CNY card will probably be cheaper than paying a Visa processing fee for every transaction.
But use of the digital yuan at the Olympics by athletes, coaches, and support staff may raise red flags back in their home countries.
In the U.S., three Republican senators warned last year that U.S. athletes should refuse to use the digital yuan during the Olympics, citing concerns that the e-CNY could expose their personal data to Beijing. However, Turrin dismisses this concern as simply “fear and loathing of China.”
“There are zero security risks to using China’s central bank digital currency, especially for those who use it in prepaid card format, which is not a connected device,” Turrin says. In the rest of China, e-CNY accounts are linked to smartphones, and users must download an app. But not, it seems, in the Olympic Village.
In fact, in the Olympic Village, the e-CNY’s low-tech interface—using cash to top up a card at a vending machine—means the significance of transacting in one of the world’s first fiat digital currencies could be lost on many of the users, but that seamlessness will be a testament to the digital yuan’s success.
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