Prior to the novel coronavirus spreading through the Western world, it did its rounds in China: tens of thousands were infected, thousands died, and a whole economy — the world’s second-largest economy at that — was brought to a standstill due to the virus.
Like the measures the West is now taking, China shut down everything and anything to stop the spread of the virus, which is especially pertinent due to the nation’s population of over one billion people. As a result, infrastructure came to a standstill and even government agencies were forced to work from home.
One effect this had on the crypto and blockchain scene in China was that the People’s Bank of China’s national digital currency project was delayed, according to a report from The Global Times — an outlet closely affiliated with the Chinese Communist Party’s de-facto media mouthpiece.
Indeed, prior to the virus, most reports indicated that the project, dubbed DCEP by some media, was on a trajectory to launch (at least in the form of a pilot) by January or February of 2020.
Fortunately, news reports indicate that the project is back on track.
China Still Hard At Work On DCEP: Report Citing Insiders
According to a report from The Global Times published on March 24th, “industry insiders” say that China’s central bank is “one step closer to issuing its official digital currency.”
The outlet’s sources explained that the PBOC and private companies — purported to include China’s largest banks and telecom and tech companies — have “completed development of the sovereign digital currency’s basic function and is now drafting relevant laws to pave the way for its circulation.”
As to why the project is moving fast, the insiders said that a digital system may be needed as central banks around the world cut interest rates to zero and even into negative territory. The insinuation here being: if China wants to properly impose monetary policy, a digital system would be the most effective.
U.S. Joining the Digital Currency Race?
The purported progress made on the DCEP project comes as some U.S. politicians proposed something astounding: a “digital dollar.”
As reported by Blockonomi previously, the Democrats in the House of Representatives on March 22nd proposed a new legislative text, the “Financial Protections and Assistance for America’s Consumers, States, Businesses, and Vulnerable Populations Act.”
In it, Democrats mentioned a “digital dollar,” then defined the term as one of two things: 1) “a balance expressed as a dollar value consisting of digital ledger entries” and 2) “an electronic unit of value, redeemable by an eligible financial institution.”
The idea with this: to distribute the thousands of dollars meant to be sent to every American, a digital system is to be created that would likely make the money available to more people and at a lower distribution cost.
Unfortunately, the latest reports indicate that the wording “digital dollar” and its respective terms have been removed from the bill, though remain in another bill that is also in the works.
Whatever the case, the fact that such a discussion came up has still been seen as a strong sign for the cryptocurrency space. As put by Chris Burniske of Placeholder Ventures:
Even if not implemented, Speaker Pelosi’s willingness to consider a digital design is a major normalization step for cryptoassets. In times of dislocation, whatever systems best solve the problems at hand are what’s implemented. And fast. As many have noted before me, this can make what first seem like emergency measures turn into the new norm.
What he’s saying is that the fact that everyone is at home, avoiding cash, and using their mobile devices may set the stage for the growth in the practicality of digital payment systems, Bitcoin included.