Chinese Agencies in Collective Blockchain Push as Restrictions Overshadow e-CNY Adoption at Olympic Games

Sixteen Chinese agencies and departments including the central cyberspace administration, have released a joint government statement on Sunday Jan. 30 announcing the launch of 15 pilot zones and several areas it has identified to “carry out the innovative application of blockchain”. 

The move is to enable every pilot to start and operate an efficient and sustainable programme that will be able to improve business processes and reduce costs as they develop reliable systems to tackle the various challenges or pain points that may want to affect their deployment. Though not a fan of cryptocurrencies as seen in the bans introduced in previous years, China has always maintained an interest in blockchain technology. The move by the 16 departments falls in line with adding to the objective of a large-scale deployment.    

Aside from the 15 comprehensive and national blockchain innovation application pilots, blockchain pilot projects will be carried out with 164 entities identified by local and departmental recommendations, expert review, online publicity and other procedures, the circular states.

The 164 entities include hospitals, universities and companies like the China National Offshore Oil Corp, Beijing Gas Group Co. and Industrial and Commercial Bank of China Ltd. The pilots are to be conducted in fields like energy, government and tax services, trade and finance, and cross border finance.

Slight itch to e-CNY embrace at Olympic Games venues 

However, despite the positive outlook, the development is coming at a time when there are suggestions that the rumoured roll out of the digital yuan (e-CNY) may not be getting the attention as it had been earlier anticipated. 

The e-CNY is expected to be rolled out for public use at the Beijing Winter Olympic which is set to start on Friday Feb. 4. The global event is supposed to be a launchpad for the much-awaited digital currency especially among foreigners considering the preparations that have been made at the various venues. 

In the build up to this point, several minor steps – direct trial by residents in major Chinese cities including for shopping, transportation and retail purposes – have been taken to culminate into what could be a grander release. 

A CNN report now says Beijing is barring most fans from attending the Games based on concerns for the spread of the Covid 19 virus which has made it create barriers to separate all categories of attendees from local residents. It describes the restrictions, known as the “closed loop system” as a complex quarantine that applies to some non-Beijing residents from around the world. It also cites the concerns some Western lawmakers have about athletes from their respective countries using the e-CNY for its supposed tendency to be used for spying.

Globally, many central banks continue to explore what they could achieve by issuing a government-backed digital currency – the latest being India which just announced plans to launch a RBI-backed ‘digital rupee’ in FY23 and also proposes 30% tax on cryptocurrency and NFTs income. China so far remains the largest economy to take the plunge to launch its e-CNY on a grand scale though. It is being seen as a likely model for other countries to follow particularly as it becomes the first to offer international visitors at the Olympic Village their first digital currency experience.