China Tracks Victims of Coronavirus with WeChat and Alipay

The government of Hubei, the Chinese province at the epicenter of the COVID-19 (Coronavirus) outbreak, issued a report on Feb. 18 detailing measures taken against the disease. The officials revealed that they tracked both offline and online purchases of fever medicine to organize relief efforts.

As the emergency situation shows no signs of slowing down, provincial officials have taken a set of measures to better control the outbreak. Pharmacies and medical institutions are now required to ask for valid ID from anyone purchasing fever medicine, presumably to treat the virus.

In addition to newly enacted measures, the government began an investigation to understand the full extent of the outbreak. As officials revealed:

“Since January 20, a comprehensive investigation has been conducted on patients with fever treated by various medical institutions and those who purchased fever and cough medicines through physical drug stores or online. The information including the time, name, citizenship number, current residential address and contact telephone numbers of the above-mentioned patients has been taken in. On-site verification, follow-up testing, isolation and treatment have been organized.”

While no direct mentions were made, it is implied that the information has been collected thanks to Alipay and WeChat, the country’s duopoly of mobile payment systems — especially for online purchases.

CBDCs unnecessary?

China is notable for its high degree of digitization within payments. With its relatively late start, the country simply skipped debit and credit card-based payments to favor mobile apps based on QR-codes.

To build on this even further, the People’s Bank of China (PBoC) is among the chief global proponents of Central Bank Digital Currencies (CBDC), or the “Digital Yuan.”

It has been hinted that its usage will be primarily in the retail and purchases sector, which would displace WeChat and Alipay as payment mechanisms.

The extreme measures taken against the Coronavirus seem to suggest that the government is perfectly capable of tracking its citizens’ purchases. The introduction of a CBDC appears to be unnecessary from the perspective of financial monitoring.

This seems to confirm previous statements by PBoC officials that focused on the geopolitical countering aspect of a digital Yuan. Specifically, officials were concerned with the potential impact that Facebook’s Libra could have on monetary policy. The digital currency would thus be a response to fears of continuing U.S. monetary dominance.

While progress with the digital Yuan is ongoing, Libra has faced a tough audience even outside of China.

Does Bitcoin fix this?

The massive, individualized tracking initiated by Chinese officials for the Coronavirus outbreak is something that can only be made possible by centralized payment systems.

While medication purchases in Bitcoin (BTC) would have likely eluded scrutiny in this case, the cryptocurrency’s ledger is completely open to the world. In case of wide cryptocurrency adoption, the government could still track its payments by just assigning identities to each wallet address.

While privacy coins like Monero (XMR) and Zcash (ZEC) could solve this issue, the subject remains complicated. The seemingly extreme surveillance measures were taken to curb the spread of a virus that could have disastrous consequences on public health — making it an ethical gray area.

Like cash, the untraceability of some cryptocurrencies would prevent such detailed investigations. Unlike cash, however, crypto cannot actively spread the infection.