![]() ![]() Taken to the extreme, these forms of digital payment could potentially void the need for traditional banks altogether while the technology underlying tokenized forms of CBDCs opens up boundless possibility for novel forms of economic policy.Ĭhina is the furthest along in its CBDC development roadmap and has already rolled out pilot tests in several major cities. payments service piggybacks on the UnionPay network to process Visa card payments made in the country.Central Bank Digital Currencies (CBDCs) could well be one of the most far-reaching advances of the 21st century. Travelers can still use Visa credit and debit cards in China, but the U.S. Having no license means Visa can’t earn money from merchant fees in China, like it does in the U.S., because it isn’t providing a payments service. Visa may still be hoping that Beijing will grant it a license to clear renminbi payments in the country, opening access to China’s roughly $16.5 trillion of annual card payments. Visa, despite applying for a license in 2017, remains an unapproved outlier. In 2020, Beijing granted Mastercard a license to operate a bank card clearing business in China too. complained to the World Trade Organization about China’s exclusionary practices, Beijing granted American Express an operating license. Until 2018, Beijing refused all foreign payment service providers the right to operate in China, handing China’s domestic UnionPay service a monopoly on domestic renminbi transactions. payments provider to operate in China for the Olympics at all. In some way, Beijing might have actually made a concession to Visa by allowing the U.S. The IOC didn’t respond to a request for comment on whether Visa was consulted before the e-CNY was approved as a payment service at Beijing 2022. However, the official Olympics website lists Visa as having exclusive rights to “prepaid cards” as well as payment services. Visa didn’t respond to a request for comment on this article.Ĭhinese media have reported that using the e-CNY as a payment system at the Beijing Winter Olympics is not a violation of Visa’s exclusive deal, because the e-CNY is just a digital-native version of China’s fiat currency. ![]() Visa has remained silent about the digital yuan encroaching on its Olympic turf. Other brands, like Coca-Cola, are known to have paid the IOC $100 million fees for exclusive, multiyear sponsorship rights. Visa extended its exclusive license with the International Olympic Committee (IOC) in 2018, paying an undisclosed sum to maintain its Olympic privileges through 2032. But Beijing hasn’t released any data on the uptake of e-CNY inside the Olympic bubble yet. There are no fees for using e-CNY in China.Īccording to the Wall Street Journal, citing an unnamed source, e-CNY payments outnumbered Visa payments inside Beijing’s main Bird’s Nest stadium during the opening ceremony of the Beijing 2022 Winter Olympics last Friday. The latter will charge a processing fee on an international payment, as would be the case for a U.S. Guests at the Olympic Village use cash to top up an e-CNY card, which they can then use for contactless payments at any point of sale in the Olympic Village.Īlthough utilizing a card interface blurs the distinction between paying in e-CNY or paying with a Visa credit card, using China’s digital currency at the Olympics is cheaper than paying with Visa. As of November, the digital currency processed $9.7 billion worth of transactions.īut to the average end user in Beijing’s Olympic bubble, China’s e-CNY payments system operates the same way as a prepayment card. According to officials, over 140 million users have registered for e-CNY accounts, which they can access through a smartphone app. “The Olympics has always been scheduled by the People’s Bank of China as the global coming-out party for the digital yuan,” says Richard Turrin, author of Cashless: China’s Digital Currency Revolution.Ĭhina began rolling out its digital currency in pilot zones in April 2020. Visa, cash, or China’s digital currency, the e-CNY. Inside the “Olympic bubble”-a dynamic quarantine zone China operates throughout the Olympic Village in Beijing-athletes, media, staff, and all other guests have three payment options available, rather than the usual two. ![]()
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