China may launch its crypto yuan early for COVID-19 stimulus

China may launch its crypto yuan early for COVID-19 stimulus

Industry insiders have hinted that China may accelerate the launch of its central bank digital currency in order to counter potential U.S. threats to Chinese financial institutions.

The report in state-run media suggested that China is taking these measures to also facilitate the implementation and management of large scale post-COVID-19 stimulus and strengthen yuan’s international settlement status.

A Beijing-based blockchain industry insider, Cao Yin, told the communist party media mouthpiece:

“The US may still pose widespread threats to Chinese institutions and impact the yuan’s standing in international settlement. In this regard, China’s state-run digital currency may be rolled out sooner than expected to counter a possible US block”

People’s Bank of China (PBoC) governor, Yi Gang, previously stated that internal pilot tests of the central bank’s digital currency (CBDC) are being carried out in four cities, including Shenzhen.

He added that there has been no official schedule for launch yet, and the tests are routine research and development work.

Online images of the app and crypto yuan were leaked to social media in April, as reported by Micky News. It was revealed that transactions can be made offline through the app using a method of touching the sender’s and receiver’s phones together.

Meanwhile, China has been rolling out unprecedented fiscal stimulus measures such as aiming to step up its fiscal policy by raising the deficit-to-GDP ratio to over 3.6%.

The accelerated launch of its crypto yuan could well add to those measures.

Featured image courtesy of glabor/Pixabay

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