Sen. Toomey: China’s Digital Yuan Could Open Doors for U.S. Crypto Space
Senator Pat Toomey, who is a top member of the Senate Banking Committee, has said China’s digital yuan could open a door for the U.S. to get more heavily into the crypto space.
In a letter to Treasury Secretary Janet Yellen and Secretary of State Antony Blinken on Friday (Feb. 4), Toomey said analysts “have raised the eCNY’s potential to subvert U.S. sanctions, facilitate illicit money flows, enhance China’s surveillance capabilities and provide Beijing with ‘first mover’ advantages such as setting standards in cross-border digital payments.”
China has been testing the digital currency at its Winter Olympics in Beijing. In Olympic Village, athletes and visitors are able to make purchases with cash, a Visa card or the digital yuan, according to Toomey.
However, since China has cracked down on private cryptocurrencies, Toomey thinks the U.S. has an opportunity to get ahead in the space. He said the U.S. could be the forerunner in crypto innovation, which he said was “grounded in individual freedom, and other American and democratic principles.”
PYMNTS wrote that China has been working towards a fully cashless society, with two private banks, Zhongguancun Bank and NewUp Bank of Liaoning, planning to end cash services within the near future.
Read more: China Nears Fully Cashless Economy
Chinese residents have shown a predilection towards Tencent Holdings’ WeChatPay and Alibaba’s Alipay to send money, rather than using cash.
Meanwhile, Beijing has been performing the pilot for the digital yuan for some time, with hundreds of millions having downloaded the connected wallet app so far. With the Lunar New Year starting, many Chinese businesses have been adapting their business models to more of a focus on the digital yuan.
Additionally, on-demand service provider Meituan has allowed over 200 types of offline merchants, including restaurants, grocery stores, movie theaters and hotels, to take the digital yuan as payments. However, the central bank has said these merchants must still accept physical money.