The 2022 Winter Olympics, officially called the XXIV Olympic Winter Games, kicked off on Feb. 4 in Beijing with crypto being a major part of the event
The 2022 Winter Olympics, officially called the XXIV Olympic Winter Games, kicked off on Feb. 4 in Beijing with crypto being a major part of the event, partly because of the Chinese government’s digital currency ambitions.
The cryptocurrency community hasn’t had strong ties to the Olympics over the last few years. The last major headline-grabbing interaction was when the Dogecoin (DOGE) community helped fund the Jamaican bobsled team in 2014 so they could attend the event in Sochi.
The 2022 Winter Olympics, however, are making history due to the presence of nonfungible tokens (NFTs), Bitcoin- (BTC)-supported athletes, the launch of the world’s first major central bank digital currency (CBDC) and their potential use as a payment method in a country that has effectively banned cryptocurrency trading and mining last year.
China’s digital yuan controversy
The 2022 Winter Olympics were supposed to be a sort of coming-out party for the digital yuan, China’s CBDC. The People’s Bank of China, China’s central bank, has been trialing the digital yuan in several areas for years now and started allowing foreigners to use the digital currency for the first time during the event.
The digital currency can be used through the government’s mobile app, e-CNY, or through mobile payments platforms developed by private sectors including Tencent Holdings’ WeChat, China’s messaging application with over one billion users.
The app’s launch was reportedly stymied by COVID-19 restrictions that saw athletes, officials and journalists be largely separated from the rest of China in a quarantine “bubble” meant to prevent the spread of various strains of COVID. This bubble, combined with the government limiting the number of in-person spectators, has seemingly seen the number of people testing the digital yuan drop significantly.
However, other reports suggested that more transactions were made using the digital yuan on the day of the opening ceremony than through Visa.
Transactions using the digital yuan have totaled more than $13 billion since its launch with roughly 10 million merchants activating digital wallets by November 2021. That figure is dwarfed by Visa’s $12.5 trillion volume for the 12 months ending June 30, 2021.
Speaking to Cointelegraph, Fergus Hodgson, director of financial consultancy firm Econ Americas, said that the Olympics have “have become a marketing opportunity for governments, usually one that loses money,” and added:
“A digital yuan is just another fiat currency that deserves to be outcompeted by private currencies or at least sovereign currencies not built on the backs of slave labor and totalitarianism.”
The perceived threat of a digital yuan on dollar hegemony has seen United States Secretary of State Antony Blinken and Treasury Secretary Janet Yellen warn against the digital yuan’s rollout at the Olympics, as it could supposedly threaten U.S. interests. In July, a group of three senators sent a letter to the U.S. Olympic and Paralympic Committee claiming that the Chinese Communist Party could use the CBDC to surveil visiting athletes.
China’s digital currency is expected to give the country’s government new tools to monitor its economy and control a larger share of the global digital economy.
David McCarville, director at law firm Fennemore, seemingly agreed, telling Cointelegraph that Chinese authorities have “cracked down on the crypto industry as a threat to their natural security,” as “the decentralized nature of crypto assets” undermines the Chinese government and its need to “censor data and monitor financial transactions for economic surveillance purposes.”
McCarville noted that there is “evidence that the Chinese authorities are intent on using the digital yuan to expand their economic surveillance activities,” adding:
“By utilizing the digital yuan, a user is susceptible to ongoing surveillance in addition to potential malware and virus exposure. Without a clear understanding of the closed source coding used to create the digital yuan, it is almost impossible to make an informed decision.”
To Eli Taranto, chief business development officer at digital bank EQIBank, China’s crypto crackdowns may not be related to its CBDC. He told Cointelegraph:
“Crypto represents a sort of grassroot revolution that is changing some balances that were in place until recently. Clearly, not everyone is in favor of these kinds of transformations but, in the long run, they won’t be able to stop them no matter how hard they try.”
NFTs at the Olympics
While China’s CBDC has been making headlines, nonfungible tokens have been used to captivate fans and art lovers.
Several NFT projects have been launched to engage with fans at the Olympics. One of the more significant initiatives came from the International Olympic Committee (IOC), which collaborated with NFT marketplace and game studio nWayPlay to launch the Olympic Heritage Collection of Olympic NFT pins.
These…
cointelegraph.com