China’s aggressively pushing for blockchain development and digital currencies, with local sources stating the ongoing coronavirus pandemic may lead to an early release of the country’s ambitious digital currency project.
However, while a central bank official says there’s no particular timeline, the currency could be seen at a major global sports event, if ongoing tests prove its potential.
Tested in “various” scenarios
Yi Gang, governor of the #PBOC says China’s #centralbank currently doesn’t have a timeline for the launch of #DCEP, and the current pilot experiments in various cities are just the necessary routine work in the development of a digital yuan. #CBDChttps://t.co/E2L2GoBnhj
— PANews (@PANewsOfficial) May 26, 2020
Gang noted pilot tests are ongoing in four Chinese cities, including the tech-driven economy of Shenzhen. He confirmed the digital currency is being tested in “various scenarios” for the 2022 Winter Olympics in Beijing, but no guarantee of a rollout exists yet.
An official launch date does not exist, says Gang. He added the bank is testing various capabilities of the digital currency, such as reliability, stability, and risk controllability, among other features.
Gang stated extensive R&D will help position the digital currency as an alternative to the existing fiat systems. He believes the project will “meet the public’s needs” and boost China’s local economy, which Bloomberg notes has been ravaged by the pandemic.
At the session attended by local reporters, Gang fielded questions on China’s coronavirus response, the government’s stimulus for local businesses, and how “quantitative easing” could help the economy.
COVID could cause early launch
Meanwhile, a local blockchain industry observer told Global Times China the state may rollout the digital yuan earlier-than-thought, especially as countries around the world seek economic growth after suffering a slowdown.
Cao Yin, who’s based in Beijing, told reporters he expects China to introduce the digital currency sooner as U.S.-China tensions add to the possibility of an economic block by Western countries. He explains:
Although the US hasn’t put Chinese financial firms and institutions onto its Entity List, the US may still pose widespread threats to Chinese institutions and impact the yuan’s standing in international settlement.
Yin notes the trackability and verifiability provided by a blockchain-based currency help tracing stimulus money, helping firms in need, and ensuring “real money” flows into the Chinese economy. His comments come after concerns about government-backed stimulus not going to local businesses, instead, falling in the hands of corporations.
The PBoC has tested digital currencies since 2014, at a very basic level earlier and amping up efforts in recent times. The government is conducting pilot tests at fast-food stores and even considering a blockchain fund to aid the broader development of distributed systems.