United States Lawmakers Express Concerns On Use Of Digital Yuan at 2020 Olympic Games
As China’s Digital Currency development continues to progress, US lawmakers are asking athletes and the Olympic committee to prevent the use of Digital Yuan during the 2022 games.
The 3 United States Senators signed a letter urging the committee to ban American athletes from making use of China’s new Central Bank Digital Currency (CBDC) during the Beijing Olympic Winter Games. The letter was signed by republican senators Marsha Blackburn, Roger Wicker, and Cynthia Lummis.
According to the lawmakers, there are privacy concerns that prompted them to bring the matter to the attention of the United States Olympic & Paralympic Committee.
The letter states,
“The digital yuan is entirely controlled by the PBOC and can be tracked and traced by the central bank. The digital yuan has been in the works since 2014, but only recently has the Chinese government released key features regarding the digital currency, including the ability of the government to know the exact details of what someone purchased and where.”
While the letter specifically mentioned the risks for US athletes’ privacy, it also referred to “problematic privacy implications” that the currency implies for global commerce.
While the Digital Yuan and other CBDCs would certainly make it easier for governments to violate privacy, the existing financial system powered by Fiat already offers several means for them to do just that.
Is Privacy a Real Concern For The United States Government?
While privacy is certainly a big issue of concern when it comes to CBDCs, the US states are especially ironic given their history when it comes to protecting privacy rights.
The United States government has been known for years for its multiple controversies regarding privacy rights. Not only has the government used anti-terrorism laws to spy on foreign entities and citizens, but also its own people.
When asked by CoinDesk about the letter, Senator Lummis stated that the country, “cannot allow America’s athletes to be used as a trojan horse to increase the Chinese Communist Party’s ability to spy on the United States.”
The United States government has also taken actions in the past to prevent people around the world from protecting their privacy via mechanisms they can’t control.
For example, it asked Apple to create a back door for its devices, as well as having the IRS offer a $625k bounty to anyone who could break Monero and Lightning, which would deal a major hit to the privacy coin ecosystem.
The world’s biggest economy is not the only government at fault here, as the cybersecurity industry has become increasingly important for world leaders as the demand for privacy-breaking technology.
This is the case of the current controversy surrounding Pegasus, which is offered to governments only.
China isn’t Winning The CBDC Race…Yet
While China is the biggest economy currently working on the development of its own digital currency, the Asian country is not leading the race at this time.
The Chinese government recently released its first white paper on digital yuan back on July 16h, in which it said a total of $5.3 billion have been transacted during trials.
However, despite this high transaction volume, China is far from leading the race according to a PricewaterhouseCoopers (PWC) report back in April of 2020.
The second-largest professional services network in the world and one of the “Big Four” accounting firms, found that Bahamas was leading on retail CBDC development at the time, with Cambodia being the only other country to officially launch its CBDC.
While China could overtake the two countries once it launches its Digital Yuan, at this time its sits in 3rd place despite having transacted a higher volume and being on an advanced development level.
The United States has still to officially join the race as while having considered the creation of a digital dollar, it has yet to launch such a project.
Federal Reserve Governor Lael Brainard urged the country back in May to start developing its own CBDC by commenting,
“Given the potential for CBDCs to gain prominence in cross-border payments and the reserve currency role of the dollar, it is vital for the United States to be at the table in the development of a cross-border standard.”
Now, the US is looking to stop China from gaining adoption for its digital currency despite it haven’t started developing its own.
Ironically, cryptocurrencies could have the potential to diminish the impact of a Digital Yuan in the global economy, but the US government has also taken an antagonizing stance when it comes to crypto.