Risk alert, as China presses ahead with digital currency plans

AFTER talking about it since 2014, China seems to have finally decided to move on its digital currency plan. Beijing's central bank recently sent out its strongest signal yet that this year is likely to see the plan come to fruition.

The immediate impetus is ostensibly fear that yuan notes could be a transmission vector for coronavirus. The People's Bank of China (PBoC) has revealed that it has had to disinfect and store bank notes for up to 14 days to stem any spread of the virus.

But the digital yuan plan was hatched long before the pandemic and clearly has a larger purpose. It picked up pace after Facebook announced the launch of Libra in June 2019. Facebook's proposed cryptocurrency would be linked to a basket of major currencies and governed by a Swiss-based non-profit consortium, the Libra Association, that would include more than two dozen companies. But the virtual currency excluded the RMB in its basket of currencies.