AI Gain | 11/03/2020

China’s Central Bank Cryptocurrency with “Zero Contact”

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As the Covid-19 epidemic continues to spread all over the globe, many people prefer to use e-payment methods that do not require physical contact with others. Considering the disease is mainly transmitted through body contact and droplets emitted from nose, eyes and mouth, people have minimised cash transactions.

Cash is rejected

In order to reduce the risk of virus transmission via paper money and coins, China’s central bank has already demanded all banks to implement two methods for revenues and expenditures. Banks will sterilise cash before releasing them to the people, while the Guangzhou branch of the People’s Bank of China (PBOC) even destroys banknotes collected from circulation areas such as hospitals and public transports. In this regard, PBOC’s Deputy Governor Fan Yifei also encourages online banks and mobile banks to provide services such as financial investments and living expenses to their clients 24/7.

In some severe areas, Covid-19 caused the rejection of cash as transaction medium, while mobile payment methods are becoming the main channel of currency circulations. In this difficult period, civilians are able to purchase food and other daily necessities without stepping a foot outside their doors by making orders and payments through their mobile phones. This method has effectively solved the major issue during this epidemic period. PBOC’s former president Li Lihui, said in an exclusive interview with China Daily that due to the effects of epidemic, the launch of cryptocurrencies will be accelerated.

The maturing of e-payment systems

The trend of payment transactions going online is not only a special need during the epidemic period, it is also the transformation direction of financial institutions in recent years. When the major mobile payment platforms in the Chinese market, Alipay and WeChat, have covered most of the daily transaction scenarios, the demand for cash transactions naturally decreased.

The convenience of mobile payment methods proves the inconvenience of cash payments and circulations. Institutions and individuals will be more inclined to use indirect transaction mediums that include cryptocurrencies in this short period of time, while cryptocurrencies will take this golden opportunity to accelerate its launch and applications.

Central bank cryptocurrencies ready to go

During the 2020’s Central Bank Work Conference, China’s central bank reiterated that “We will continue to steadily advance the development of legal digital currencies.” The development of the digital economy has become the core energy of China’s economic development. As the arrival of the digital financial era is inevitable, the launch of fiat cryptocurrencies will be boosted through “Zero Contact”.

 

AI Gain hopes that the epidemic will end soon and people can get back to normal life as soon as possible.