The Chinese government has been working swiftly to digitize its currency. The stakes, however, are rising.
After adopting blockchain technology as part of its national program last year, it became clear that China’s own ‘digital yuan’ (DCEP) would someday be released. However, with the coronavirus now throwing a wrench in global events, the rollout may come sooner than anticipated.
As an industry insider told Global Times recently, the post-coronavirus world has accelerated the need for digital currencies. [Global Times] According to the source:
“[The] US may still pose widespread threats to Chinese institutions and impact the yuan’s standing in international settlement.”
This is why work on the DCEP may now be accelerated. China is reportedly afraid that the U.S. may place sanctions or blocks on the country’s economic dealings in dollars.
Indeed, blockchain development in the country has sped up. Currently, four cities are carrying out pilot tests of the DCEP, according to the People’s Bank of China. As BeInCrypto previously reported, last month the country approved 224 new blockchain projects from brands like Alibaba and China Mobile. One city, Suzhou, even plans to dedicate a whole development district to blockchain technology.
If all plays out as planned, China could be the first state-backed digital currency to be widely used. In light of growing geopolitical disputes, the country hopes that it can leverage the DCEP as an alternative to the dollar.