BOAO, China – China is trying to allow foreign athletes and visitors to use its digital currency during the 2022 Beijing Winter Olympics, a senior central bank official said on Sunday.
This could be the first test for Chinese digital currency with international users.
Li Bo, deputy governor of the National Bank of China (PBOC), also said the goal of the digital yuan or e-CNY (electronic Chinese yuan) is not to replace the dominance of the U.S. dollar on the international stage.
PBOC began researching the digital yuan in 2014, and recently launched a series of pilot projects across China that allow city residents, including Shenzhen and Beijing, to test currency at retail. The goal of e-CNY is to replace cash and coins in circulation and boost non-cash payments in China. It is not a cryptocurrency and is not designed like bitcoin.
“For the upcoming Beijing Winter Olympics, we have tried to make e-CNY available not only to domestic users, but also to international athletes and similar visitors,” Li said during a panel moderated by CNBC at the Boao Forum for Asia on Hainan Island.
Li said China’s central bank would include “more scenarios and more cities” to test the digital yuan.
The deputy governor said that there is still no time frame for the national introduction of the digital yuan, but that the PBOC must increase the scope of its pilot projects and “strengthen” the technological infrastructure that supports the digital currency.
The challenge for the US dollar?
Various commentators have suggested that the Chinese digital yuan could be a way to internationalize the renminbi and at the same time challenge the US dollar as the world’s reserve currency. Most international trade takes place in US dollars.
But Lee reiterated that the PBOC is focused on domestic use of digital currency.
“As for the internationalization of the renminbi, we have said many times that it is a natural process and our goal is not to replace the (US) dollar or any other international currency,” Lee said. “I think our goal is to allow the market to select and facilitate international trade and investment.”
A red package in digital Chinese currency is seen on a mobile phone in an arranged photo as the city of Chengdu begins distributing 200,000 E-CNY ‘red packets’ worth 40 million yuan on February 24, 2021 in Yichang, China’s Hubei Province.
VCG | Visual China Group | Getty Images
However, PBOC is working with other central banks – including those in Thailand, the United Arab Emirates and Hong Kong – to research the use of the digital yuan in cross-border trade.
“Our focus is again on first wanting to establish a very solid domestic e-CNY and build a healthy ecosystem. At the same time, working with our international partners. We hope to have a long-term cross-border solution as well,” Lee said.