How the 2022 Beijing Winter Olympics Boosted China’s Digital Currency

The 2022 Beijing Winter Olympics is not only a splendid sports event, but was also an unprecedented economic boost for China’s newly launched digital currency. At this year’s Winter Olympics, China’s digital e-CNY wallet made its public debut and gained international attention.

As the bank partner for the Winter Olympics, People’s Bank of China was responsible for the local and foreign currency cash services and the operation of the digital transactions during the event. In addition, People's Bank of China, together with Visa and UnionPay, jointly issued the Winter Olympics-themed double-standard credit card.

According to a report from Chinese financial news outlet Jiemian in December 2020, the digital RMB/Yuan (the Chinese currency) Winter Olympics pilot application was launched on the Beijing Subway Daxing Airport Line. Figure skating world champion Shen Xue used digital yuan to purchase Beijing's first digital subway ticket, and experienced the use of the Winter Olympics wearable device wallet to pass the gate.

Liu Liange, chairman of People's Bank of China, said in an interview with Sina News that the appearance of digital currency at the Winter Olympics is an important achievement of the "Technology Winter Olympics."

As of December 2021, People's Bank of China has created more than 40,000 digital currency exchange scenarios in Beijing and Zhangjiakou, covering diverse needs such as "food, housing, transportation, travel, shopping and entertainment."

In a press conference on January 18, Zou Lan, head of financial markets at the People’s Bank of China (PBOC), said nearly 261 million individual users, which is about one-fifth of China’s population, had set up e-CNY wallets so far, and 87.5 billion yuan ($13.78 billion) worth of transactions has been made using the digital fiat currency.

What’s it like to use digital RMB during the Olympics?

During the Beijing Winter Olympics, People's Bank of China provided two major digital RMB payment services — soft wallet and hard wallet.

The soft wallet service is provided through the digital RMB App. The usage method is similar to the mobile payment that consumers use daily, and the operation is simple and convenient. According to different authentication methods and real-name levels, wallets can be divided into one, two, three and four types. Among them, the fourth type of wallet can be opened only by mobile phone number.

For those who come to China from abroad, it is not necessary to open a bank account in mainland China to open a digital wallet. They can download the digital RMB App through an overseas mobile phone number to open different types of anonymous wallets. ​​ On the other hand, hard wallets provide services in the form of physical wallets, and Winter Olympics-specific products such as cards and wristbands. During the Olympics, users can handle wallet services at People's Bank of China outlets, Winter Olympics contracted hotels, Visa customer service centers in the Winter Olympics area and experience payment services at merchants that accept digital RMB.

“It is very convenient,” Ranie Liu, a volunteer for the Winter Olympics told The Org. "The volunteers and staff I have come into contact with basically use the digital RMB app every day. The download, registration and binding of the bank card are completed in a few minutes. The digital hard wallet is also guided by the staff from the People's Bank of China throughout the process. It can be used directly in meals, cafes and specialty shops. Now we are quite skilled in using digital RMB."

Pingbao Yan, an Economics professor at Xi'an University of Finance and Economics in China, told The Org that because of the use of digital RMB, the 2022 Beijing Winter Olympics will be the first Olympics to widely use digital currency.

“This will for sure go down in history,” Yan said. “It has changed the currency circulation and economic and financial development for the Olympic Games of the entire world.”

What’s the future of digital currency for China?

The Beijing Winter Olympics was only a part of the pilot work for the digital RMB. Yan believes that through the experiment during the 2022 Winter Olympics, China’s digital wallet will have more complete functions and better performance, and eventually become a digital currency with broad prospects worldwide.

However, at present, mobile payments such as Alipay and WeChat Pay have been integrated into people’s daily lives for a long time. And as for places where financial service coverage is insufficient, the public is still more dependent on cash. In this context, why promote the digital RMB?

Experts say the answer is the need to help the development of the digital economy. To achieve high-quality development, China needs a more secure, universal and inclusive new retail payment infrastructure as a public product. To meet the diverse payment needs of the people, and to improve the level and efficiency of basic financial services.

Digital currency also comes at a low cost and is safer. “The Progress of Research & Development of E-CNY in China” issued by the People's Bank of China pointed out that the digital RMB does not count interest, and the bank does not charge the designated operating agencies for exchange and circulation services, and the designated agencies do not charge individual customers for the exchange of digital RMB. The design of sub-wallets can also better protect user privacy.

According to the report, for the next step, the People's Bank of China will continue to steadily promote the digital currency research and development pilot, further expand the coverage of pilot application scenarios, study and improve relevant systems, deepen the research and evaluation of the impact of legal digital currency, including monetary policy, financial system and financial stability.

In addition, China will also actively participate in the international exchange of legal digital currency, discuss and formulate legal digital currency standards and rules openly and inclusively, and jointly promote the development of legal digital currency on the world stage.