“Mobile money is absolutely embedded in people's ordinary way of life. With paying via smartphones already second nature in China, the country is a natural testing ground for digital money, says Mark Perry, a professor of computer science at Brunel University. Lipsky says that over the coming years, China could seek to promote more international trade in digital yuan, and avoid financial systems such as the US-run Swift, particularly with participants in its Belt and Road initiative. It also has the power to restrict the influence of Alipay and WeChat Pay, owned by tech giants Ant Financial and Tencent, which the government fears have become systemic.įor now, Lipsky argues, Beijing’s priorities are largely inward-looking: “We look at the digital yuan and think, ‘What are their international ambitions when it comes to the dollar, is it displacing the dollar as a reserve currency?’ I think a lot of that is overstated.” Last week the IMF downgraded its growth outlook for China to 4.8pc for 2020 due to disruptions from its zero-Covid policy among other reasons. The digital yuan also has features such as expiry dates, which could encourage more consumer spending at a time when Beijing wishes to boost growth. Josh Lipsky of US think tank The Atlantic Council, and a former adviser to the International Monetary Fund, says Beijing’s surveillance apparatus and its ability to gather economic data would be massively enhanced by the ability to track transactions. The country has unique reasons for pursuing a virtual coin. It began work on the project in 2014, and testing in four cities in April 2020. While most major central banks around the world have been toying with the idea of virtual currencies, the People’s Bank of China (PBOC), headed by Yi Gang, has had a head start. Visitors will be able to convert foreign cash to the central bank-issued digital money at special machines dotted around the village, at which point the currency can be loaded onto a card or app. Aside from Visa – an important Olympic sponsor – and cash, already rarely used in China, the digital yuan will be the other main payment method.
In the Olympic village, China’s ubiquitous digital payment services, Alipay and WeChat Pay, won’t be accepted.
It will be the first taste many western athletes and their teams - foreign spectators are banned - will have had of the digital yuan, or e-CNY. The Games will also offer China the chance to showcase its push into virtual currency - a move that has alarmed diplomats and human rights campaigners. Ahead of an opening ceremony this Friday, Beijing’s Winter Olympics have been enveloped in controversy: marred by diplomatic boycotts, Covid restrictions and a row over the treatment of tennis champion Peng Shuai.
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