Banknotes, coins, and card machines may become vulnerabilities for epidemic prevention. The Bank for International Settlements once again calls for an assessment of the feasibility of Central Bank Digital Currencies (CBDC).

The novel coronavirus is raging globally, with domestic experts occasionally pointing out that "banknotes and coins" could become a breeding ground for the virus. Foreign studies have also indicated that the virus can survive on banknotes and coins for up to 4 hours, and even up to 7 days on smooth surfaces like tables. In light of this, the Bank for International Settlements (BIS) reiterated its support for central banks to develop central bank digital currencies (CBDC) and digital payments in its latest report.

• The risk of transmission through card machines may be higher than cash
• BIS has advocated for digital currencies multiple times

Banknotes, Coins, and Card Machines Could Become COVID-19 Vulnerabilities

The latest report released by the Bank for International Settlements (BIS) on April 3 warns that concerns about the potential spread of the coronavirus through cash payments have led to a strong recommendation for central banks worldwide to consider developing digital currencies.

Due to previous warnings from the World Health Organization (WHO) about the virus potentially spreading through banknotes, consumer attitudes towards cash have significantly shifted:

• Increased circulation of cash in the United States
• Significant decline in ATM withdrawals in the UK (reduced demand for cash)
• Rapid rise in contactless payments

Note: Contactless payment includes forms such as credit cards, debit cards, and mobile payments.

Regarding the increasing prevalence of contactless payments, the BIS emphasizes:

Touching card machines and entering PIN codes may increase the risk of coronavirus transmission, while the likelihood of transmission through banknotes is relatively low. In the mid-term, the pandemic may lead to a deliberate increase in cash holdings by the public to prepare for emergencies, resulting in a structural increase in transactions using mobile phones, credit cards, and online payments.

China Holds 2020 National Currency, Gold, and Silver Security Conference

Among various countries, China has been the most proactive in exploring central bank digital currencies. The People's Bank of China summarized the achievements in currency, gold, silver, and security work since 2019 at a conference held in Beijing on April 3, analyzing the current situation and challenges. The key points include:

• Deepening the transformation of currency, gold, silver, and security businesses
• Strengthening top-level design and steadfastly advancing the research and development of legal digital currency
• Successfully issuing the 2019 version of digital renminbi, launching pilot areas, and steadily advancing the research and development of legal digital currency

BIS Advocates Central Bank Digital Currencies

The BIS believes that the current economic environment may rapidly draw attention from authorities worldwide to central bank digital currencies (CBDC) as the primary payment infrastructure. However, the design of these currencies must be resilient to various impacts, such as the coronavirus and cyberattacks.

In fact, the BIS has consistently held a positive view on central bank digital currencies. Earlier this year in January, Benoît Cœuré, a French economist, former Executive Board member of the European Central Bank, and head of the BIS Innovation Hub, stated:

China's leadership in digital currency is the reason I call for unity among central banks worldwide. I hope this will not lead to fragmentation of the global financial system. Therefore, the development of digital currencies requires international cooperation, and research should start now.