West Remains Skeptical of Digital Yuan Ahead of Use in Olympics

Prospective users and commentators from the West remain skeptical of China’s rollout of the digital yuan during the ongoing Winter Olympics in Beijing.

Data privacy remains the primary concern for most prospective users, many of whom are already mistrustful of Chinese tech, according to global head of payments at Berlin-based consultancy Roland Berger Sebastian Maus.

“For foreign users, anonymity and privacy is the main issue of concern for the application of digital yuan,” Maus said. “And this is a big concern [for foreign users]. Therefore, I doubt that a lot of tourists or athletes will really download the app and use it.” 

Although the app will have four different levels of user security, users can still opt for sharing as little information as possible. “But even in the simplest model with just a cell phone number, no one really believes that their transactions will be anonymous and will be private,” said Maus.

Olympic rollout

Currently, the digital yuan is only one of three payment options available at the Olympic Village, where it could see its first usage by foreign athletes and visitors. However, many seem to opt for the alternative of cash or games partner Visa.

“Many of us are using the digital wallet here since I didn’t bring cash with me – it is quite convenient,” said one Chinese volunteer staying at the Olympic Village. “The foreign athletes mostly use their Visa cards though,” he added, “I don’t understand this.” Maus believes that only “really a small portion” of those who decide to register for a digital wallet are likely to revisit the currency upon eventually returning to China.

A forbearance of its use by American athletes would be in line with recommendations from US senators. Last summer, three called on the US Olympic Committee to forbid American athletes from “receiving or using the digital yuan during the Beijing Olympics.” This sentiment was echoed by Senator Pat Toomey this past week.

Digital yuan development

Authorities have been pilot-testing the digital currency for use at the games for over a year, amounting to 9.6 billion CNY ($1.5 billion) in transactions in 2021. By the end of January, the central bank announced that over 261 million users had registered a digital yuan wallet, nearly double the amount since October.

In preparation for the games, the regulator said that the digital yuan had been tested in more than 400,000 “scenes” involving real purchases of goods and services. This had involved over 12 million individual users and 1.3 million company users in the capital registering on the app.

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