Turning A Crisis Into An Opportunity, China Gets One Step Closer to CBDC
As central banks around the world are cutting interest rates to zero and taking aggressive action against the economic recession due to the coronavirus pandemic, China’s central bank is accelerating its central bank digital currency (CBDC) plan. The Global Times also mentioned a number of Shenzhen-based private companies including Alibaba, Tencent, Huawei and China Merchants Bank have participated in the development of the digital currency.
China’s long term goal is to get ahead of the international economic development game Cao believes that accelerating the CBDC plan can help turn a crisis into an opportunity, as cryptocurrency is seen as the most convenient tool to translate a central bank's zero and negative interest rate policy into commercial banks. He added that: "If there is a chance China is considering lowering its interest rate into negative territory as an final option and directing such policy to commercial loans and lending, a circulated digital currency rather than M0 will be able to achieve that."