Banking Cryptocurrency Currency Government News Regulation

Coronavirus Delays China’s Digital Currency, Or Does It?

March 1, 2020
Ross Peili

author:

Coronavirus Delays China’s Digital Currency, Or Does It?

New intel wants China’s central bank-issued digital currency in the works, the so-called DC/EP, delayed due to the coronavirus outbreak.

According to domestic outlet Global Times, sources close to the matter said that while the official period of release was set to the first quarter of 2020, it may be delayed amid to concerns regarding the ongoing epidemic.

Nevertheless, the People’s Bank of China has confirmed that the launch of the long-awaited digital currency will go ahead as planned, based on PBoC’s technological expertise, resources, and talent which can catch up to expectations regardless of the pressuring situation that literally plagues the country.






While many tests have been performed in the past, a pilot run of the DC/EP is being scheduled for later this year, and it will be pulled with the help of local micropayments processing apps such as WeChat, and AliPay. 

Details regarding the exact circulation protocol as well as other key distribution factors are still being discussed between the government, the People’s Bank of China and local tech firms. 

Read More: The US-China Rivalry Could Be More of a Noble Fair Play

Coronavirus is surging the demand for a nation-wide Digital Currency

Shentu Qingchun, the CEO of Bank Ledger, a Shenzhen-based blockchain firm, and one of the few DLT-focused firms involved in the deployment of the DC/EP said that PBoC is going to make an official announcement subjecting the matter before the end of March.  

Whether that announcement will be a postponing note or the actual deal remains unknown, although Qungchun believes that time is not on PBoC’s side on this one. 

On the other hand, Cao Yin, the vice director of the Advanced Research Institute of Blockchain says that the Chinese central bank has been developing and preparing to launch the project for quite some time now, so it is natural that we all expect a release anytime this year.   

Besides their headquarters in Beijing, the People’s Bank of China is expanding its digital currency R&D centers all over the country with two new additions including facilities in the cities of Shenzhen, and Suzhou respectively.

The PBoC had applied over 65 patents involving DC/EP and in general digital currencies, while only 22 patents involved PBoC’s institute of printing science and technology, which is basically the watchdog of the fiat realm in China, similar to US Federal Reserve. 

Read More: JPMorgan: Blockchain is Key for Digital Money

Some speculators believe that analyzing the patents applied for digital currencies by the central bank might actually reveal the operative protocol of the DC/EP, although that has not been confirmed yet. Still analyzing these patents can give us a hint of what to expect from the first state-backed digital currency on the globe. 

From one perspective the coronavirus epidemic has kneed the country to its hardest spot for over a decade, yet Shentu among others believes that exactly because the digital currency involves less physical interactions, it might be even a catalyst to speed things up in the development process. 

According to Global Times, the Guangzhou branch of China’s central bank said that all used banknotes circulating in hospitals, wet markets and public transportation platforms such as buses will be destroyed immediately in order to combat the spread of the virus after biotech experts suggested that the COVID-19 could actually sustain its existence even on paper for some time.