China could be the first test its digital yuan with international users during the Beijing Winter Olympics in 2022, a top central bank official.
April 19, 2021 | AtoZ Markets – China will make it possible for foreign athletes and visitors to use their digital currency during the Beijing 2022 Winter Olympics. This was stated by one of the officials of the People’s Bank of China (PBOC) on Sunday.
“We are trying to make e-CNY available not only to domestic users, but also to international athletes and other visitors for the 2022 Olympics,” commented Li Bo, deputy governor of the PBOC.
Li also added that the Chinese authorities will include more cities and more locations that will accept the digital yuan in order to test their technology in practice.
Digital yuan will not compete with the US dollar
In his speech, Li Bo said that the digital yuan was created for the country’s internal needs, and not to compete with the US dollar.
“Regarding the internationalization of the yuan, we have said many times that this is a natural process and our goal is not to replace the US dollar or any other international currency. our goal is to provide the market with choice and facilitate international trade and investment, ”said Lee.
Note that China has been actively testing the digital yuan since 2020 , becoming the first country in the world to create its own central bank digital currency (CBDC). Already in November last year, the digital yuan’s transaction volume surpassed the $300 million mark.
Circle CEO Jeremy Allair recently shared his views on the Bank of China’s launch of its own digital currency. He believes that this step will give a powerful impetus to the popularization of the yuan and can raise its international status.
“It seems to me that China is pursuing several goals in this case, but the most promising direction is the opportunities that open up for the yuan in terms of its global spread. In fact, the Chinese cryptocurrency can become an intermediary for the yuan, able to spread it around the world for use in everyday transactions. In this sense, the PRC cryptocurrency will become the basis for the internationalization of the yuan,” he suggested.
But Bloomberg analysts are confident that the main task of the digital yuan is to shatter the dominance of the dollar, and the Chinese authorities are doing everything possible for this.
“Today, as is well known, the dollar dominates the yuan in foreign exchange markets, central bank reserves, trade and interbank payments through the Belgium-based Society for Worldwide Interbank Financial Telecommunications (SWIFT). And Chinese developers are trying to replace this system,” writes Bloomberg.
If China succeeds in making the digital yuan a global means of payment, then the dollar’s leadership will indeed be in jeopardy.