The economic challenges caused by the coronavirus pandemic have increased the urgency for Chinese companies to adopt the use of a digital currency, Guo Weimin, chief scientist at the Bank of China, said on Tuesday. While there is no official timetable for the launch of China’s sovereign digital currency, the People’s Bank of China is reportedly aiming to release the e-yuan, also known as the Digital Currency Electronic Payment , before the start of the Winter Olympics – an event expected to take place in February 2022 in Beijing. So far, pilot programmes have been rolled out in the Chinese cities of Shenzhen , Suzhou, Xiongan and Chengdu. Digital red packets – based on the gift envelopes traditionally given out during holidays and special occasions – have been provided to consumers for spending at retail shops and restaurants. Guo said the key advantage of the e-yuan system was its ability to trace cash flow and make it easier to enforce financial regulations, which were absent from traditional payment systems and created huge challenges for the real economy. There will be a lot of challenges from the pandemic that will make good cases for the use of digital currencies Guo Weimin For example, the pandemic has created issues surrounding the collection of debt and collateral by businesses that are struggling to survive. The problem showed the need for a digital system that provided closer scrutiny of payments, said Guo during a panel discussion at the Asian Financial Forum in Hong Kong, Risky investments in the property market that did not fit the original plan of a project could also be monitored with the digital currency, he said. “[Regulatory capacity and traceability] should be the key focus given the current economic situation, as this has become rather urgent,” Guo said. “There will be a lot of challenges from the pandemic that will make good cases for the use of digital currencies.” In addition to the big four banks – Bank of China, China Construction Bank, Industrial and Commercial Bank of China and Agricultural Bank of China – two more state-owned banks, Bank of Communications and Postal Savings Bank of China, are working with authorities on the development of the e-yuan. Zhou Ziheng, chairman of Zhejiang Modern Digital Finance Research Institute, said future development of the digital currency would shift away from its focus on consumer use to business and government applications. People’s Bank of China’s digital currency already used for pilot transactions worth 1.1 billion yuan “The corporate side is much more important because it would involve the digitalisation of corporate assets and financial digitalisation,” Zhou said at the forum. “This makes digital currencies apparently different from just digital payments.” China already has established digital payment platforms like Alipay and WeChat Pay. In the second phase of experimentation, use of the digital currency will be expanded beyond the domestic market to cross-border payments using Hong Kong as a conduit, said Zou Chuanwei, chief economist at consultancy Wanxiang Blockchain. China’s Ministry of Commerce announced in August last year that the digital currency would soon be tested in several new regions, including the Greater Bay Area, an integrated economic hub that takes in Hong Kong, Macau and nine Pearl River Delta cities. Hong Kong is working with Thailand’s central bank to promote the digital currency in cross-border trade. Given its role as an international financial centre and the world’s largest offshore renminbi hub, Hong Kong is well positioned to facilitate the international expansion of the e-yuan, said Laurence Li Lu-jen, chairman of the Hong Kong Financial Services Development Council.