Coronavirus outbreak could accelerate China's digital currency issuance, says former central bank president
February 20, 2020, 11:47AM EST
1 min read
Efforts to combat the coronavirus could accelerate the Chinese central bank's plans to issue a digital currency, according to a former president of the People's Bank of China.
In a February 16 interview with China Daily, Lihui Li argued that a digital currency's efficiency, cost-effectiveness, and convenience make it especially desirable during an epidemic. Li previously helmed the People's Bank of China and now serves as the blockchain lead for the state-run National Internet Finance Association.
To prevent the spread of the virus via physical cash, the government has quarantined some old paper notes and distributed 600 billion yuan ($85.9 billion) in new money in Huobei, where the virus outbreak originated. Meanwhile, millions of people are restricted to their homes by government order, making it difficult to make payments in person.
As such, as an alternative and wholly digital currency – as well as other forms of digital payment such as those offered by AliPay and WeChat Pay – would become popular, said Dong Yang, a Renmin University of China professor who works on blockchain and fintech research.
However, Li also noted that the adoption of any central bank-backed digital currency still partially depends on demand from the retail market in China, which is currently dominated by Alipay and WeChat Pay.
"China's modern and emerging electronic payment platform is very mature, and WeChat Pay and Alipay online payment platforms have ranked first and second in the world," Li said.
Today the always-on demands of online markets have to be matched with the ability to access opportunities instantly and with no limits. Historically correspondent banks would move large sums of money for those needing to transfer funds while creating bottlenecks of unnecessary friction.
Ethereum had a breakout year in 2021. It’s native asset, ETH’s, market capitalization surpassed $500 billion for the first time. Its network facilitated upwards of $7 trillion value transfer. Non-fungible tokens (NFTs) emerged as another “killer application” that have put its technology on the global stage and caught the attention of the masses.