COVID-19 THE PUSH FOR CBDC Launch

While it might not be right to say that, interest in CBDC (Central Bank Digital Currency) began after the COVID-19 pandemic set in, the health crisis did prove to be a motivational factor. Practical health concerns would also change mindsets that, were not so long ago skeptical about a national cryptocurrency. 

The COVID-19 health crisis is likely to pull back the previously touted concept of ‘globalization, we might want to refer to it as de-globalization. As nations aim to become more self sufficient, governments will seek to keep financial powers within their control. This is where a centralized digital currency would fit in well. 

Medical experts agree that we are years aware from an effective vaccine to handle the COVID-19 virus. Effective medical treatments are still being worked out, the challenges across the globe have been tremendous. The technical possibility of the coronavirus being transmitted through various surfaces, has pushed the case for contactless payments. 

Online payments are becoming increasingly familiar to people. Besides being contactless, online payments of also facilitate online purchases – something that is happening on a large scale with lockdowns being implemented. And even after lockdown norms have been watered down or totally lifted, people might prefer to spend lesser time in crowded malls and shopping centers. The basic fact is that, online payments are here to stay. 

As people get familiar with the ease and speed of online payments, acceptance for a CBDC (Central Bank Digital Currency) would be impressively high. This works for governments too as they, keep a tab on financial activities. 

We cannot end this report without talking about the US multi trillion dollar stimulus packages. These packages sought to put cash directly in the hands of citizens. Analysts were quick to point out that, a digital dollar would have made, the entire process of distributing the stimulus – faster and more cost effective. 

So don’t be surprised if you see a wave of Central Bank Digital Currencies being launched, as the severity of the COVID-19 pandemic decreases. A few nations have already launched serious debates on the subject. 

 

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