China Continues CBDC Development Despite COVID-19 Setback

Central banks around the world are taking strong action against the economic recession caused by the coronavirus pandemic. But China’s central bank is speeding up its CBDC development.

06 April, 2020 | AtoZ Markets – The People’s Bank of China (PBoC) has been working on a central bank digital currency project for three years now. It completed the basic function design of CBDC. Despite the COVID-19 setback, it seems that the organization is on the right track to launch the Chinese digital yuan in 2020.

Chinese Digital Yuan Development on Track

The PBoC held a teleconference on 3 April in Beijing, China. However, one of the main points confirmed during the call concerned the continued research and development of a digital currency for the central bank, or CBDC.

China’s fierce pursuit for a digital central bank currency, or CBDC, demonstrates its commitment to the infrastructure of virtual currency. Despite the difficulties encountered in the recent past due to an epidemic of coronavirus, the country’s central bank still gives high priority to the development of the CBDC. Recent reports suggest that the Asian country plans to launch a CBDC sometime in 2020.

The meeting summarized the central bank’s achievements in fiat money, gold, silver and securities since the end of 2019. The executives analyzed in-depth the current challenges of the bank. They recognized that their main priority for 2020 is further research and development of a CBDC. Their top priority is to:

  • Improve the design of the high-level system,
  • Relentlessly advance research and development at the CBDC,
  • Systematically promote the reform of the cash issuance and return systems,
  • Accelerate promotion of banknote processing activities, issuance of bank guards and issue funds.

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China Accelerating CBDC Development

The Bank of China completed the development of the essential functions of the official digital currency and is currently preparing laws that will assist in its implementation. However, several private companies based in Shenzhen, participated in the development of the digital currency. It also included Alibaba, Tencent, Huawei and the China Merchants Bank.

Cao Yan, managing director of the Digital Renaissance Foundation, said these private companies were selected based on their rich experience in blockchain and third-party payments. He also believes that speeding up the CBDC plan can help turn a crisis into an opportunity.

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