- The three Republican senators raising objections have cited privacy and security concerns with the use of Digital Yuan.
- The lawmakers noted that the CCP can exploit the use of e-CNY as a surveillance tool.
China’s plans of putting its Digital Yuan to use at the 2022 Winter Olympics in Beijing face a severe hurdle. Putting the spanner-in-the-wheel, U.S. Senators have objected to the use of Chinese CBDC citing security concerns.
On Monday, July 19, three U.S. Senators from the Republican party – Marsha Blackburn, Cynthia Lummis and Roger Wicker – wrote a letter to the U.S. Olympic Committee leadership. Thus, the lawmakers have asked the decision-makers to forbid the U.S. athletes from “receiving or using digital yuan during the Beijing Olympics”. Citing privacy concerns, the lawmakers wrote:
Olympic athletes should be aware that the digital yuan may be used to surveil Chinese citizens and those visiting China on an unprecedented scale, with the hopes that they will maintain digital yuan wallets on their smartphones and continue to use it upon return.
Additionally, the senators have requested a briefing of their appeal in the next 30 days. This will also be a display of a fresh battle between the two giant economies in the digital currency race.
Besides, in the letter, the senators also raised the concern of the Chinese Communist Party (CCP) using such emerging technologies to suppress the Uyghur minority and the people of Hong Kong. They also targeted China’s popular digital payments & messaging platforms like WeChat calling it a tool to “surveil, threaten, and arrest” Chinese citizens.
Earlier in July, the Biden administration blacklisted some more Chinese firms on concerns of human rights abuses in the Xinjiang province.
China’s progress report with Digital Yuan
The People’s Bank of China (PBoC) has accelerated the development of the Digital Yuan over the last few years. Undoubtedly, it is one of the most advanced CBDC projects in the world.
Last week, PBoC released the official whitepaper for the Digital Yuan. The central bank noted that the CBDC transactions have topped $5.3 billion. To push further the use of Digital Yuan, PBoC will also allow travelers to open Digital Wallets while visiting the country.
As per the official numbers from PBoC, over 20.8 million individuals have already opened the virtual wallet. However, the Digital Yuan still remains in the trial phase. The central bank has yet not officially confirmed the full deployment of the Digital Currency Electronic Payment (DCEP).
There have been concerns that the rapid growth of Chinese CBDC could challenge the status quo of the U.S. Dollar, as the world’s reserve currency, in the international market. Besides, the Republican senators also fear that the CCP can attempt to exploit the use of e-CNY as a surveillance tool.
Last week in an interview with EpochTV, an American hedge fund manager also warned of the threats of Chinese CBDC. He said:
I think that we should ban the [Chinese digital] currency and not allow any of it to be handled in the United States. I know that sounds hyperbolic, but if you just think all the way through this, you can’t have a little bit of cancer. You either have cancer, or you don’t have cancer.
He also said that the Chinese CBDC will have a “mind of its own”. It could potentially have access to private data of Americans like Social Security numbers and addresses.