As millions around the world watched the opening ceremony of the Olympics this Friday, US Senator Pat Toomey (R-PA) had another aspect of the games in mind: the international debut of the digital yuan (e-CNY ).
In a Feb. 3 letter to Secretary of State Blinken and Treasury Secretary Yellen, Senator Toomey expressed concern over the rollout of the digital yuan, which, along with cash and Visa, is one of only three modes of payment accepted at the Olympic Village this year. While 261 million Chinese users have signed up for yuan digital wallets since the currency’s launch in 2019, this is the first time yuan digital transactions will be available to non-Chinese citizens.
Citing e-CNY’s “potential to reverse U.S. sanctions” and “enhance China’s surveillance capabilities,” Sen. Toomey asked the two departments “to take a close look at Beijing’s CBDC deployment. during the Olympic Games. CBDC refers to a central bank digital currency, of which the digital yuan is by far the largest to date.
Senator Toomey’s letter comes six months after U.S. Senators Marsha Blackburn (R-TN), Roger Wicker (R-MS) and Cynthia Lummis (R-WY) expressed similar concern to the U.S. Olympic Committee, asking the committee to Ban China’s Use of Digital Yuan in American Athletes. According to their letter, the digital yuan “can be used to monitor Chinese citizens and those visiting China on an unprecedented scale,” allowing the government “to know the exact details of what someone has purchased and where.”
Indeed, while China’s stated goal for e-CNY is to meet “public demand for cash in the age of the digital economy”, nonpartisan observers such as the Carnegie Endowment for International Peace have speculated that increased CCP control and oversight over financial transactions may be the primary motivation for the currency’s advancement. Notably, the Chinese government banned all cryptocurrencies last September and launched a state-controlled blockchain-based service network (BSN) that has the explicit intention of “becoming the only innovative global infrastructure network autonomously by Chinese entities”.
Senator Toomey’s desire to observe e-CNY at the Olympics also appears to be driven by a desire to put the United States at the forefront of the digital currency revolution. In his letter, Toomey highlighted the “first mover” advantage China is gaining by rolling out its CBDC now, and states his desire to help America remain a leader in “digital currencies and digital innovation.” . Toomey has previously expressed support for the United States’ own CBDC, which the Federal Reserve has considered but has not yet made formal plans for implementation.
Although Toomey’s concerns seem valid, actual adoption of e-CNY at the Beijing Olympics remains limited. Most foreign athletes would still use their Visa card.