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Digital yuan is the Chinese central bank digital currency project. When several countries were exploring to issue their own national digital currency, China took the lead and introduced its CBDC. However, to debut the project the nation received several warnings from the United States. Still, the Chinese government planned to debut an international trial for the eCNY at the 2022 Beijing Winter Olympics. Such measures are being taken amid the concerns from Pat Toomey, the US Senator over the potential of the currency to circumvent US sanctions.
China aims to boost the presence of digital yuan
The trials and pilot programs for the digital yuan have been ongoing domestically in China since 2009. On Thursday, the project was issued to athletes and foreign visitors to transact for goods inside the Olympic Village alongside Visa payments and cash.
The Chinese government seeks to boost the presence of eCNY throughout the nation with the Winter Olympics as its platform to showcase the entire world.
Chinese entities joining domestic retail CBDC tests
Notably, the trial for the digital yuan follows a recent announcement. The announcement listed 164 national blockchain entities to join domestic retail eCNY tests. The test will examine the feasibility of its products across a wide range of industries.
However, cryptocurrencies like Bitcoin and Ethereum are still banned in the nation, although China is a bigger proponent of blockchain. It is also notable that although advocates of blockchain technology, they do so in a much more private, centralized, and censored form.
US Senators closely examining Beijing’s eCNY rollout
On Wednesday, Pat Toomey penned a letter to Janet Yellen, US Treasury Secretary and Antony Blinken, Secretary of State. In the letter, the US senator asked the policymakers to closely monitor Beijing’s digital yuan rollout during the games and to provide his office with a briefing.
According to the US senator, analysts have raised the eCNY potential to subvert the United States sanctions. Moreover, the CBDC could facilitate illicit money flows and enhance the nation’s surveillance capabilities. Besides, the initiative would provide Beijing with first mover advantages such as setting standards in cross-border digital payments.
Following the facts, Toomey seeks to request knowledge on the CBDC rollout including its distribution, user experience and the underlying source to determine ulterior motives, censorship features or security flows.
On the other hand, Toomey also seeks answers regarding the extent to which non-Chinese government officials, including the United States transacted in the digital yuan among other requests. According to the senator, China’s crackdown on crypto presents an opportunity for the US to be the forerunner of cryptocurrency innovation.
