The coronavirus is delaying the launch of China's digital currency, the DC/EP, the Global Times reported today. The coronavirus has caused the world to shut its borders to China, and many cities in China are on lockdown.
“The coronavirus outbreak has led to postponed work resumption in government institutions, including the People's Bank of China (PBC). Policymakers and research staff involved in the DC/EP project are no exception, which weighs on the development process," an anonymous source told the Global Times. The Times is a Chinese tabloid that conforms to the editorial stance of the Chinese Communist Party and tends to report the official party line.
The purpose of China's digital currency
The DC/EP is the digital version of China’s national currency, the yuan. Everyone in China can use it, and it’ll allow the government to have control over and insight into the country’s financial affairs. It would eventually replace paper money, and is billed as a way to make everything in China’s centrally planned economy run more smoothly. The digital currency is also aimed at helping China and its trading partners wean themselves off the US dollar.
The Global Times story seemed like it was intended to manage expectations. It said that though the Coronavirus would delay the launch of the new digital currency, it would still occur in this calendar year.
A silver lining?
"The central bank has been preparing for the launch, both technologically and theoretically, for a long time. The technological roadmap has been laid out already," Cao Yin, vice director of a blockchain research institute attached to Tsinghua University, told the Global Times.
Last month, local media outlet JRJ reported that China has completed much of the development for the digital currency. Chinese news outlet Caijing reported that China will trial the technology in Shenzhen, which the country has been positioning as the business alternative to rebellious Hong Kong, and Suzhou.
The CEO of crypto company BankLedger, which is involved in the launch of DCEP, found a silver lining in all this. He told the Global Times that the coronavirus might well increase awareness of DCEP, which functions as a replacement to germ-spreading cash.