Chinese Blockchain Scholar Says Coronavirus Outbreak Will Promote Development of Central Bank’s Digital Currency

The Coronavirus epidemic in Wuhan, China has not ceased, which has impacted many industries, but it also has the opportunity to accelerate the development of the central bank’s digital currency (CBDC). Blockchain scholar Zhu Youping, deputy director of the China Economic Network Management Center of the National Information Center, said in an interview that the epidemic will not affect the Internet industry, but it is expected to increase the speed of development, especially replacing cash with CBDC.

Zhu Youping believes that after the SARS epidemic broke out in 2003, the result was the rapid development of e-commerce, and this time it is expected to promote the development of digital currencies. Because cash may spread the virus, and CBDC can solve this problem, “it adds anti-virus function.” At the same time, the transaction volume and amount of mobile payments in the past three years have compound growth rates of 83.5% and 39%, respectively. Therefore, the reason for promoting the development of CBDC is better in the context of preventing virus spread and high-speed growth.

Currently, central banks in many parts of the world, such as the US Federal Reserve, the European Central Bank, and the Bank of Japan, have stated that they need to study the application and risks of CBDC. Zhu Youping pointed out that digital currency is the general trend. From the original barter to gold and silver to banknotes, it is inevitable that it will develop into digital currency in the future. These changes are called the currency revolution and have also made socio-economics more efficient.

As for the first widely recognized digital currency in Bitcoin, Zhu Youping believes that he has accumulated some trial and error experience and can be used as reference data in developing CBDC in the future. At the same time, central banks’ research in related fields has become more active, which is a signal worth paying attention to. Zhu Youping said that the US Federal Reserve may be worried that the digital currency will replace the US dollar, so the development of the CBDC hopes to maintain the status of the US dollar.

After the current Coronavirus epidemic in Wuhan, the economic situation will return to normal. In the future, the demand for CBDC will be very large, and it will become the mainstream direction of digital transformation. Zhu Youping estimates that if the epidemic can be effectively controlled in the first half of the year, China will have a great chance to launch the CBDC in the second half of the year, and it is expected to play a greater role in promoting the internationalization of the RMB in the future.