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China wants to compete with Bitcoin.  The digital yuan will be tested at the Olympics

China wants to compete with Bitcoin. The digital yuan will be tested at the Olympics

China is one of the biggest opponents of cryptocurrency. According to some analysts, the most populous country in the world is to blame for the massive drop in the bitcoin exchange rate last November. A short while ago, the China National Development and Reform Commission announced that it would “continue to fight cryptocurrency mining.” The committee is particularly concerned about the fact that cryptocurrency mining leads to “high electricity consumption and emissions.”

Committee representatives also stressed that virtual currency mining “does not have any advantages for industrial development or scientific progress.”

True, this would not be the first time that few Beijingers have criticized the path of Bitcoin. The world’s last known cryptocurrency lost more than $10,000 (CZK 221,650) when the Chinese central bank announced in September that all cryptocurrency transactions were banned. The ban applies not only to services provided in China, but also to companies providing foreign cryptocurrency transactions in the most populous countries in the world.

Practically speaking, this means that the Chinese are not allowed to trade in cryptocurrencies in any way. It is also illegal for anyone in China to provide any cryptocurrency transactions to foreign companies or individuals.

The digital yuan as an alternative

Thus, the state-controlled digital yuan is an alternative to bitcoin and other cryptocurrencies in the world’s most populous country. Deployment will be tested on foreign users during the Olympic Games.

The shops, cafes and merchants inside the Olympic Village, where the athletes will live and spend their spare time, will be equipped with digital yuan machines. Shops at train stations near the games will also be equipped in the same way.

Beijing Olympic Village Operations Director Zhou Songming said payments at the Games will be limited to a few ways. In all competitive and non-competitive events during the Olympics, it will only be possible to pay with cash in yuan, visa cards and digital yuan. Visa is the gaming sponsor.

It’s just a test so far

The Winter Olympics, which officially begins on February 4, are being seen as an opportunity for China’s central bank (PBOC) to raise awareness about e-CNY. The digital currency has advanced since 2020 and is now being tested in about a dozen regions across the country.

Officials say 140 million people had signed up for the digital yuan by early November, although residents still rely heavily on Alipay’s Alipay and Tencent Holdings’ WeChat Pay for daily payments. Both apps now support payments in digital yuan, but will not be available for payments in the Olympics. Many internet giants, such as JD.com, Trip.com, and Meituan, accept payments in electronic Chinese yuan.

The app allows people to transfer money from bank accounts to an e-wallet and make or receive payments by scanning a QR code or connecting a phone to a payment device. Previously, consumers could only download the e-wallet via a non-public link obtained from bank employees when applying for an account.

The Bank of China added that this will be the first time that its application will be available to foreigners. It will be a critical test of its services, and the bank said it is important for it to ensure that foreign visitors have a good experience with the digital yuan.

It remains to be seen whether foreign athletes will adopt the digital yuan due to heightened political tensions over the games and concerns about the risks of obtaining personal data. Last July, three Republican senators called on the US Olympic Committee to ban US athletes from using the digital yuan, citing espionage and data security concerns.