If you turn on the news, chances are you’re going to hear or see something about the coronavirus outbreak that originated in the Chinese city of Wuhan; for the past few weeks, the number of cases of this illness, which has a relatively high mortality rate when compared to the flu and seems to be easily transmissible, has been put into the limelight by the fearing world.
Due to the rapidly-spreading coronavirus, designated COVID-19 by the World Health Organization, many have been questioning how this outbreak will affect the economy.
Case in point: analysts have been talking about the subject matter incessantly, trying to determine in what way will China’s hampered industrial capabilities affect supply chains, equities, tourism worldwide, and so on and so forth.
Some analysts and pundits have also tied this to crypto. In fact, a top Chinese executive argued that the People’s Bank of China, the nation’s central bank, may expedite the launch of its digital currency, long rumored to have been worked on.
China’s Digital Currency Could Soon Launch Because of the Coronavirus
Per an article from China Daily — a newspaper owned by the Publicity Department of the Communist Party of China — Lihui Li, a former president of the Bank of China (not to be confused with the central bank), said that the epidemic unfolding will likely accelerate a national digital currency. Li purportedly made these comments in an interview with the outlet.
Li purportedly added that a digital currency from the PBOC is likely to benefit retail businesses by decreasing costs and increasing the efficiency of transactions.
This was echoed by Fan Yifei, deputy governor of the People’s Bank of China. He said at a news conference held on Saturday that the central bank is going to accelerate its work in the mobile payment field, adding that while there has already been widespread adoption of systems like WeChat Pay and AliPay, there should be more measures to “encourage online banking, mobile banking and other channels to provide customers with [finanical services.]”
These comments come in response to news that China is quarantining not only people but banknotes, with paper money and coins being known for allowing for viruses to fester on their surfaces. China has distributed 600 billion yuan worth of notes in Hubei province, reports indicate.
Not the Only Way the Outbreak is Affecting Bitcoin
The potential expedited launch of China’s national digital currency isn’t the only way that the outbreak has been affecting the Bitcoin industry at large.
In a Weibo post, Jiang Zhuoer, the operator of mining pool BTC.Top, revealed that a mining facility of his and other facilities were shut down by local police. He wrote:
I have a mine in a remote suburb. The police came and forced all the mining authorities to shut down. [W]hat’s the benefit of shutting down the mining machine to prevent the epidemic?
This seems to be factual: after months and months of an uptrend, the hash rate of the Bitcoin network has finally begun to stagnate, with this stagnation starting around January, lining up with the shutdown of many of China’s facilities to prevent coronavirus risks.
There have also been a number of crypto conferences delayed or canceled outright. Most notably, Token2049 — a Hong Kong conference that this writer intended on attending this March — was pushed until October.
There’s also been some talk of how the coronavirus outbreak could cause chaos on global markets, potentially proving that Bitcoin is a store of value in tumultuous geopolitical and macroeconomic times. This narrative is developing, as stocks and BTC continue to trend higher in spite of the outbreak.