The central bank digital currency is one of three payment methods that can be used at the upcoming Games, alongside cash and Visa cards.
There are now less than four weeks to go until the Winter Olympics begin in Beijing — and China wants the digital yuan to take center stage.
The central bank digital currency is one of three payment methods that can be used at the upcoming Games, alongside cash and Visa cards.
This means that Alipay and WeChat Pay, mobile-based payment platforms that are hugely popular on the mainland, are being snubbed.
Visitors will be able to use the digital yuan by downloading a mobile app or acquiring a physical card — and foreign fiat currency can also be converted into the CBDC at self-service machines.
Bloomberg also notes that athletes are being given the chance to use wristbands that facilitate contactless payments at convenience stores and cafes within the Olympic Village.
Last summer, three U.S. politicians had warned that American athletes shouldn't be allowed to use the digital yuan amid concerns that it "may be used to surveil Chinese citizens and those visiting China on an unprecedented scale."
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A Huge Test
China has been ahead of the curve when it comes to developing a central bank digital currency — sparking fears that the U.S. and Europe are far behind in building their own.
The Winter Olympics could be crucial in promoting the digital yuan and boosting its recognition internationally, as well as encouraging Chinese consumers to give it a go.
Alipay and WeChat Pay both accept the digital yuan, also known as e-CNY, but the People's Bank of China have also launched their own app in an attempt to reach consumers directly.
Trivium China analyst Linghao Bao told CNBC that adoption of e-CNY may be affected by "friction" — and consumers may feel that there's little incentive to switch from the payment methods they currently use. He added:
"You have to download the app, sign up, then top up your wallet. I'm not sure consumers want to go through these extra steps."
Speaking to the news outlet, Eurasia Group's Paul Triolo argued that the digital yuan's exposure at the Winter Olympics may be diminished as COVID reduces the number of people in attendance — with a number of countries declaring a diplomatic boycott. But he added:
"Over time, there may be some niche areas where the digital RMB could see greater use, such as paying certain types of government related bills, or for things like transportation, particularly if the central bank offers incentives like red envelopes and other inducements."
There have been concerns about China's digital yuan rollout — with central bank officials previously stating that they wanted to achieve "controllable anonymity" with this asset.
But the challenges that Beijing faces now could provide food for thought for other major economies as they race to launch a CBDC. How can they best incentivize consumers to make the switch from good ol' cash and coins, or tools like PayPal and Apple Pay?
