Monday Breaking News: China Debuts Digital Yuan at Winter Olympics
During the 2022 Winter Olympics, China has officially debuted its central bank digital currency (CBDC), known as the digital yuan (eCNY). This is the first release of CBDC across the world, as other countries remain in the research and development phase of exploring CBDC options.
The eCNY is currently being offered to athletes and foreign visitors to the Olympic Village in Beijing as the first rollout of a pilot program of the CBDC. The eCNY, as a legal tender, links a person’s phone number to transactions taking place on an application. It can be exchanged without any intermediaries, and has the capability of easily transferring the digital currency from one to another through just tapping two phones, or through scanning QR codes.
The U.S., on the other hand, have explored a federal backed digital currency, and has recently released a report evaluating the benefits and downsides of a federal backed USD stablecoin. However, it doesn’t seem like these plans will come to fruition anytime soon.
The U.S. is also concerned with the fact that China has obtained the first mover advantage on CBDC. Senator Pat Toomey, in a letter to Treasury Secretary Janet Yellen, said that eCNY has the potential to facilitate illicit money transfers, enhance surveillance on financial transactions, and even get under trade sanctions in place of Chinese produced goods.
Regardless, the fact that a CDBC has been officially released is great news to the crypto market, as it validates the possibility of digital currency as a legal tender. The fact that it is being released by the biggest economy in the world is further proof that the future of financial transactions will shift towards digital currency exchanges.
With this news in mind, the crypto market has been reinvigorated, as ETH, BTC, and other major altcoins continued to gain momentum.
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