The World Health Organization, on Wednesday, declared COVID-19 a global pandemic. Officially known as COVID-19, CNBC reported on March 11 that coronavirus has spread sufficiently worldwide to warrant classification as a pandemic. From Asia to the Middle East, Europe, and the United States, the virus has spread quickly to over 121,000 people.
Will Covid-19 Drive Inception of the Digital Yuan?
Former Chinese Central Bank president told press reporters that they are currently considering digital currency as a way to counter the spread of Coronavirus. It came following a government ultimatum to clean cash in February, before giving it back to the public.
In fact, the government has quarantined old paper notes worth at least $85.9 billion. As a result, they also published the same amount of new money in the virus ‘ originating area-Hubei. The ultimatum required banks to issue sterilized notes only to the public. Therefore reducing the chances of spreading of coronavirus during transaction activities from person to person.
The former People’s Bank of China president Lihui Li told China Daily how a digital payment system would bring convenience during epidemics. Lihui Li currently serves as the blockchain head for National Internet Finance Association (NIFA). NIFA is a state-run fintech organization.
In addition, Lihui Li highlighted the adoption of digital stablecoins was partially dependent on retail demand. For instance, the retail market in China is presently dominated by WeChat and Alipay. Both of these are pretty excellent forms of digital payment and alternative payment means.
In the aftermath of the coronavirus attack, both micro-and macroeconomics suffered. The effect has obviously impacted money supply, especially from high-risk sites. PBOC requires officials, for example, to seal all the money from hospitals and volatile markets and issue it to the central bank. And the central bank reissues the money back to circulation.
China’s PBOC deputy governor highlighted the nation’s focus on national health and safety. The official said:
“After the outbreak, we paid great attention to the safety and health of the public’s use of cash,”
Some of the safety measures that the Central Bank has implemented include suspending cash transfers between provinces. As well as minimizing the movement of business and government personnel and thereby reduce the risk of transmission. Moreover, the Central bank also issued at least $4 billion worth of banknotes to Wuhan. Which is a percentage of the 600 billion new yuan notes that the bank allocated to disinfect the cash in circulation?
Some have felt that disinfecting the monetary supply will have minimal impact in containing the disease. Muhammad Munir, a professor at England’s Lancaster University said it was difficult to remove traces of the virus from objects, including banknotes. Munir said:
“While COVID-19 can spread through contaminated objects, the duration of coronavirus survival on currency notes is not determined”
He also added that since most of China’s daily purchases are made online, the impact of cash restriction will have a slight effect on the spread of coronavirus.
The virologist said the only way to curb disease transmission has been through good hygiene. Advice that many medical professionals have been communicating with the public.
Washing hands using alcohol sanitizers could easily restrict hand to hand transmission of the infection. Since the point of transmission among most people exchanging cash is through the hands. Therefore, maintaining hand hygiene should be top of the list while curbing the spread of coronavirus.
On the other hand, a couple of people have felt the need for a central bank-issued stablecoin. This, they say, would be desirable and convenient in times of national disasters.