The COVID-19 pandemic is making cash-based societies all over the world sink into oblivion with the help of decentralized technologies.
Technology has always been one of the main drivers that has boosted social changes. Of course, there have been other reasons: wars, natural cataclysms and disasters, plague pandemics and more. Speaking of such, the current COVID-19 situation, being a once-in-a-century type of pandemic, has come at an inconvenient time. But the time is never right.
The rise of digital currencies
Digital currencies, which had previously been raising controversial questions, now see high demand both from ordinary users and institutional investors. What couldn’t be changed naturally for a long time has shifted fast during the crisis. Global adoption of digital payments and cryptocurrencies has already started.
From old traditions to new trends
Ongoing changes in social interactions may become irreversible, changing the world forever. The life of humanity has become even more digitized, and we are witnessing an accelerated transition to a cashless society.
In Europe, the pace of change has been accelerated. Suddenly, everyday things such as paper money have transformed into dangerous items. Cash-loving European citizens have started to use cards more.
Instutions step in digital world
Moreover, the road to mainstream crypto adoption has begun, as institutions have stepped in, in a big way. The interest from the population is also growing. Institutional investors are highly interested in something that can protect them from risks, and it means that more and more investors will take a look at the crypto market over time.
Transformation of society
The incentivization of interest from global players has also contributed to the transformation of society and crypto adoption. We now see that some people that have gained help from the government during the pandemic have spent it on Bitcoin (BTC).
The growth of the crypto market and demand for this new kind of money has become even more noticeable during spring 2020.
The global view on crypto has shifted from a “geeky asset for speculation” to an “asset that shelters from crisis.” The trust is hard earned, and blockchain can offer trust quantification of a yet unprecedented level.
EU and US Regulators still fall behind China
Meanwhile, speaking of regulated approaches to cryptocurrency projects, we don’t see much progress. The European Central Bank’s approach to digital coins still remains analytical rather than a practical call to action.
Finally, the European Central Bank is looking to renovate its payments infrastructure, studying both public and private solutions, with or without blockchain.
As for government-issued stablecoins, competition still remains sluggish as China leads the race with the digital yuan program.
It’s clear that the distributed ledger technology topic is of interest, and the technology is there, but Europe is way ahead of the U.S. when it comes to experiments with stablecoins that may be backed by governmental bonds. Regulatory bodies worldwide enjoy watching private companies experimenting with this business model. Paving the way to its legitimization is possible in the form of e-money version 2.0.
In 2020, apps for cryptocurrencies have become advanced enough to enable the purchase of digital currencies with just a credit card, allowing for the sending of small amounts of money even without the need for Know Your Customer protocols. Stablecoin wallets are in high demand, and this evident trend is no more a millennial-only kind of thing.