The U.S. warns about digital yuan as Winter Olympics kicks off

With the Beijing 2022 Winter Olympics’ opening ceremony done and all competing athletes now in China, two members of Congress are warning of the risks of using digital yuan at the games.

According to Reuters, Pat Toomey, a Pennsylvania Senator, wrote to Secretary of State Antony Blinken and Treasury Secretary Janet Yellen on Thursday, raising concerns that the government of China could use the games to promote wider adoption of the digital yuan, the Chinese central bank’s digital currency. 

China plans a grand CBDC entry in Olympics

Since April 2020, China has been undertaking CBDC trials, with the announcement that foreign athletes and visitors will be able to use it during the upcoming Olympics.

Toomey said that the global rollout of the digital yuan might assist in establishing a standard in cross-border payments, posing a threat to U.S. interests. The Federal Reserve has discussed the possibility of issuing a digital dollar but has yet to make a decision. 

The Pennsylvania Senator is said to have requested information from the State and Treasury Departments on the number of international visitors who used China’s digital yuan during the Olympics to see whether the rollout may provide any relevant data for U.S. authorities considering a CBDC.

“The importance of remaining a leader in the global digital economy and supporting new innovations like digital currencies is a significant domain of strategic competition with other countries, including China,” Toomey added.

In January, the PBoC launched a test wallet for its CBDC e-CNY. Many U.S. lawmakers are rallying behind the athletes, with some, such as Minnesota Representative Tom Emmer, issuing a last-minute warning to athletes not to utilize digital yuan while in China. In proposing legislation to limit the Fed’s power to issue a CBDC, Emmer referred to China as being under “digital authoritarianism.”

Good luck to all the @TeamUSA athletes competing in the Olympics.
 
Word to the wise – Do. Not. Accept. Any. Digital. Yuan.

— Tom Emmer (@GOPMajorityWhip) February 4, 2022

The Beijing 2022 Winter Olympics will be China’s first significant test of the CBDC in front of a large worldwide audience. Transactions using the digital yuan have reached over $13 billion since its launch almost two years ago, with around 10 million businesses activating digital wallets for the CBDC by November 2021.