The Beijing Winter Olympics are set to conclude on Sunday after two weeks of showcasing the best of human sportsmanship and, of course, controversy.
But the event has also been used to showcase something altogether different: China’s new digital currency.
The digital yuan had already been trialed in various cities across China last year, but the Games have been the first time it has been piloted on a global stage with mainly foreign users.
To my mind, there are two major takeaways from this rollout.
First, digital currencies are an inevitability in the ever more digital world that we live in. When tech is driving the way we live, work, do business and much more besides, it makes sense to have money that runs on tech too.
Also, millennials – who are set to be the beneficiaries of the largest ever generational transfer of wealth (an estimated US$60 trillion) – have been raised on technology, they’re digital natives. As such, the future of money is also, without doubt, going to be digital.
It’s not just the authorities in Beijing who know this. According to the Atlantic Council, 90% of governments around the world, representing 90% of global GDP, are actively pursuing their own central bank digital currencies (CBDCs).
China might have been the first large, industrialized nation to launch a CBDC, but it will not be the last. Far from it.
Second, the digital yuan underscores why the world will still want cryptocurrencies such as Bitcoin.
The People’s Bank of China’s new currency might have many advantages, including convenience and speed of payments, but what it does not have is privacy. Indeed, the digital yuan will serve to give Chinese authorities even greater oversight of citizens’ transactions.
Yaya Fanusie, a senior fellow at the Center for a New American Security, recently said in an interview: “The government is going to be able to trace all transactions, generally, whether they are anonymized or not.”
Beijing will have even more powers to track and control.
Bitcoin and cryptocurrencies – still digital money – are fundamentally different as they run on an open, immutable blockchain, or distributed ledger.
