BOAO, China – China is trying to allow foreign athletes and visitors to use their digital currency during the 2022 Beijing Winter Olympics, a senior central bank official said on Sunday.
It could be the first test for China’s digital currency with international users.
Li Bo, deputy governor of the People’s Bank of China (PBOC), also said that the goal of the digital yuan or e-CNY (Chinese electronic yuan) is not to replace the dominance of the US dollar on the international stage.
For the upcoming Beijing Winter Olympics, we have 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
PBOC began researching the digital yuan in 2014 and recently launched a series of pilot projects around China that allow city dwellers, including Shenzhen and Beijing, to test the currency with retailers. E-CNY aims to replace cash and coins in circulation and increase cashless payments in China. It is not a cryptocurrency and is not designed as 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 visitors,” Li said in a panel moderated by CNBC at the Boao Forum for Asia on Hainan Island.
Li said China’s central bank will include “more scenarios and more cities” to test the digital yuan.
The deputy governor said that there is still no timeline for the national launch of the digital yuan, but that the PBOC needs to expand the scope of its pilot projects and “strengthen” the technological infrastructure underlying the digital currency.
Challenge to the US dollar?
Various commentators have suggested that China’s digital yuan could be a way to internationalize the renminbi and also to challenge the US dollar as the world’s reserve currency. Much of international trade takes place in US dollars.
But Li reiterated that the PBOC is focused on the internal use of digital currency.
“For the internationalization of the renminbi, we have often said that it is a natural process and our goal is not to replace the US dollar or any other international currency,” Li said. “I think our goal is to allow the market to choose and facilitate international trade and investment.”
A digital red package in Chinese currency is seen on a mobile phone in a photo arranged as Chengdu City begins distributing 200,000 40-yuan E-CNY “red packages” worth 40 million yuan on February 24, 2021 in Yichang, Hubei Province of China.
VCG | Visual China Group | Getty Images
However, PBOC is working with other central banks – including those in Thailand, the United Arab Emirates and Hong Kong – to explore the use of the digital yuan in cross-border trade.
“We are once again focusing on the fact that we want to first establish a very strong internal e-CNY and build a healthy ecosystem. At the same time, working with our international partners. We hope that in the long run we have a cross-border solution as well, “Li said.