China: CBDC makes a low key debut at Winter Olympics, two banks phase out cash

After eight years of guesses, discourse, and conflicting reports, China’s digital yuan CBDC made a rather low-key debut at the 2022 Beijing Winter Olympics on 4 February.

Time to introduce “yuan” self

Though China intended to make the introduction of the digital yuan a worldwide spectacle to showcase its fintech finesse, this wasn’t to be the case due to foreign boycotts of the Beijing Olympics and COVID-19 restrictions.

Even so, the country reported some impressive stats: 261 million users who registered for a digital yuan wallet, and around $1.5 billion racked up in digital yuan transactions.

However, there is some discrepancy in the figures. Governor Yi Gang of the People’s Bank of China previously reported about 56 billion RMB or roughly $8 billion in total transactions, which is far from the 9.6 billion CNY reported by Al Jazeera.

What’s more, U.S. representatives have vocally expressed their suspicions as well, with some even warning their native athletes to reject China’s digital currency.

Pro-Bitcoin Senator Cynthia Lummis too wrote about the need for American athletes to be wary of Chinese state surveillance through the digital yuan.

When banks back out

The digital yuan’s introduction to the world stage comes shortly after two banks in China announced that they were phasing out banknotes and coins.

Though the two banks were private financial bodies, this move goes against Yi’s promise that cash-based services would not die out in the near future. In November 2021, the PBOC Governor had said,

“China has a vast territory, a large population and diverging regional development. Cash will not demise in the foreseeable future. As long as there is demand for cash, we will continue to supply cash.”

However, some of the banks phasing out cash expressed their intention to focus on digital services and online payments using the digital yuan.

Pilot is ready for take-off

China may not be a fan of decentralized cryptocurrency, but is aggressively pushing for the development of blockchain infrastructure. Less than a week before the Olympics, China’s Cyberspace Administration issued a statement announcing that 15 areas and 164 institutions would be part of a pilot program to explore the use of blockchain tech across various sectors, industries, and administrations.

Shanghai and Beijing were two of the 15 chosen zones.