P Xenos and M Bacina
Bank of China: Coronavirus causing crawl on CBDC release
It has been reported that the coronavirus (COVID-19) outbreak has impacted the pace of work on China’s proposed central bank digital currency (CBDC).
An unnamed source is quoted as saying:
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 Digital Currency Electronic Payment (DCEP) project are no exception, which weighs on the development process.
Since the outbreak in Wuhan, the Chinese government have been forced to quarantine large sections of the country, resulting in over 780 million people placed under travel restrictions and thousands of small businesses to shut down.
However, despite the delays caused by the virus, sources close to the development of the CBDC affirm that authorities are intent on moving forward with their plans for the project. Although, it can be rightfully argued that moving forward with its development may be beneficial in containing the spread of the virus, as digital currencies would reduce the need for hand-to-hand exchange of fiat currency notes.
So far, the PBC has established another two research institutes specializing in digital currencies in Shenzhen, South China's Guangdong Province and Suzhou, East China's Jiangsu Province, in addition to its headquarters in Beijing, all of which are being reported as having achieved "fruitful results."
It is speculated that the pilot test for the CBDC will happen sometime before the end of 2020. The PBOC had planned to provide public updates concerning the project before the end of Q1 2020, but given the present delays, this may come later in the year.