The Beijing Winter Olympics are set to conclude on Sunday after two weeks of showcasing the best of human sportsmanship and, of course, controversy.
But the event has also been used to showcase something altogether different: China’s new digital currency.
The digital yuan had already been trialed in various cities across China last year, but the Games have been the first time it has been piloted on a global stage with mainly foreign users.
To my mind, there are two major takeaways from this rollout.
First, digital currencies are an inevitability in the ever more digital world that we live in. When tech is driving the way we live, work, do business and much more besides, it makes sense to have money that runs on tech too.
Also, millennials – who are set to be the beneficiaries of the largest ever generational transfer of wealth (an estimated US$60 trillion) – have been raised on technology, they’re digital natives. As such, the future of money is also, without doubt, going to be digital.
It’s not just the authorities in Beijing who know this. According to the Atlantic Council, 90% of governments around the world, representing 90% of global GDP, are actively pursuing their own central bank digital currencies (CBDCs).
China might have been the first large, industrialized nation to launch a CBDC, but it will not be the last. Far from it.
Second, the digital yuan underscores why the world will still want cryptocurrencies such as Bitcoin.
The People’s Bank of China’s new currency might have many advantages, including convenience and speed of payments, but what it does not have is privacy. Indeed, the digital yuan will serve to give Chinese authorities even greater oversight of citizens’ transactions.
Yaya Fanusie, a senior fellow at the Center for a New American Security, recently said in an interview: “The government is going to be able to trace all transactions, generally, whether they are anonymized or not.”
Beijing will have even more powers to track and control.
Bitcoin and cryptocurrencies – still digital money – are fundamentally different as they run on an open, immutable blockchain, or distributed ledger.
We’ve seen in the past week how geopolitical risks are demonstrating real-life cases and just how different – and valuable – cryptocurrencies can be, compared with CBDCs.
Research shows that Bitcoin donations are flooding into Ukrainian non-governmental organizations and volunteer groups. The crowdfunding activities are, say experts, being used to equip the Ukrainian army with military and medical supplies.
Meanwhile, Ukraine’s adversary, Russia, is planning to regulate cryptocurrencies, with crypto legislation, including tax standards, expected as soon as next week.
Both these rivals know that Bitcoin and cryptocurrencies can circumnavigate traditional financial institutions that might block transactions, as in crypto there’s no central authority that can block payments.
Elsewhere, we’ve recently seen that the advantage of raising funds in cryptocurrencies is that it’s a lot harder to confiscate them.
In what many have argued is down to political overreach, a decision was made by GoFundMe to remove the donation campaign for the Canadian “Freedom Convoy” trucker protest from its site and return the millions of dollars back to the donors.
But in response, crypto enthusiasts set up a crowdfunding campaign on the platform Tallycoin as an alternative way to raise money for the protesters.
While it’s almost a given that other major nations will follow China and launch their own digital currencies, cryptocurrencies like Bitcoin will still have the upper hand.
Not only are they a store of value and medium of exchange but they have other inherent core values, namely being a viable decentralized, tamper-proof, unconfiscatable monetary system. And this has intrinsic value for investors around the world.
Nigel Green is the founder of deVere Group. Follow him on Twitter @nigeljgreen