COVID-19 will pave the way for CBDCs

[Abiky]

In times where social distancing is a must, the way we make payments changes in its entirety. Physical cash will cease from existence, as they serve as "carriers" or "vehicles" of the deadly coronavirus "COVID-19". Governments will notice that printing more money will not be worth their time, leading them towards the creation of their very own digital currency. That is if the pandemic continues extends long enough in order to have a negative impact on the world's economy.

Considering that everything has been moving to the "online world" lately, I believe that the coronavirus pandemic will pave the way for CBDCs (Central Bank Digital Currencies) quicker than we've expected. After all, it'll be much safer to conduct transactions online (and eco-friendly too) than doing so in the physical realm. Crypto will rise like never before because of this, leading towards the accelerated development of CBDCs.

While many countries like the US and Russia are skeptical about crypto/Blockchain technology, they might change their stance once they see it's no longer worth printing physical cash. China has already been working on a CBDC solution of its own, so it's only a matter of time before it starts rolling it to the public.

What are your thoughts? Will this be the era of CBDCs? Or is it still too early to tell?

[Darker45]

What is happening right now is certainly an additional support in favor of developing a digital currency. The argument for CBDCs is made a little stronger due to this. While a pandemic as large as this does not happen often, it is always prudent to be at least taking the safer path. With the population explosion that we have been facing, a fiat bill or coin shifts hands countless of times in a single day. And if it is indeed true that unseen virus and bacteria could survive in it for a few hours, that is enough to wreak havoc on an entire village or even a country. And, after all, we are now on the threshold of a digital age.

[dothebeats]

Right. Central banks may see highly infectious disease and epidemics as a justification towards their creation of digital currencies. Then again, it needs a lot more than that, and the public really needs more convincing for them to accept this novel idea of replacing physical cash with online ones. Perhaps after the older population is gone, they will have to push even harder for this to become a reality, but for the time being I don't think there is any solid reason to hasten the formation of CBDCs.

[senin]

For the first time on such a scale, states are now taking measures to disinfect paper money in connection with the spread of coronavirus, and they themselves are urging people to use it less and switch to non-cash forms of payment. It is unlikely that the coronavirus pandemic will last too long, but the current situation will certainly contribute to the further crowding out of paper money and the issuance of nationally stable state coins. Figures have already appeared that about 70 percent of all states are working on the creation of their digital currencies of central banks. Many states have already noted the positive role of digital currencies compared to paper money, because every few years paper money must be replaced with new ones, and this is a very costly process. However, people, and even states, are not yet ready to completely switch to non-cash forms of payments.

[figmentofmyass]

While many countries like the US and Russia are skeptical about crypto/Blockchain technology, they might change their stance once they see it's no longer worth printing physical cash. China has already been working on a CBDC solution of its own, so it's only a matter of time before it starts rolling it to the public.

What are your thoughts? Will this be the era of CBDCs? Or is it still too early to tell?

you're probably right, the pandemic will accelerate things. south korea is burning cash as a public health measure, and the USA government is obviously embracing the idea of digital currency too. i'm not sure all these systems will incorporate blockchains though. they may just use trusted databases.

the stimulus bill they just passed in the USA actually included a provision creating the "digital dollar"---a central bank issued digital currency. they were planning on using it to pay out stimulus money, but it was stripped from the bill at the last minute. they are paying out stimulus funds via the IRS tax return system instead. https://www.theblockcrypto.com/linked/59692/digital-dollar-proposal-stripped-from-latest-house-democrat-coronavirus-stimulus-bill

[Yaunfitda]

Right, as @figmentofmyass has said, US is moving towards a digital dollar to combat this pandemic.

So probably we will see countries moving in this direction, China will accelerate and possible that other EU nations as well. I'm still a bit skeptical about Russia though, we all know that they want to put everything under their control. Although issuing digital + <insert local fiat here> might be also be used as surveillance measures to track everyone.

[carter34]

It is now clear that digital currency has a place in the history of humanity because of what we are seeing now. I guess the world is now waiting for the pandemic to be over before real focus on bitcoin starts properly.

[Raflesia]

Well, this is too early for the development of CBDC because the government cannot do that in a short time, maybe developing countries in technology will recognize CBDC, how about other countries will require a long process and I think this pandemic will not be as long as there is, so real money will to become an irreplaceable medium of exchange that is irreplaceable.
As the epidemic continues to spread and increase some people do not make contact transactions, but that is only partly so what about the small people if they will be able to with it? I do not think so.
When this social distance is what they use is the best thing maybe online transactions will be safer than having to contact but after the situation recovers it will be normal when real money will be used a lot.
CBDC is only a few central banks that are available.

[Sadlife]

They've already approved a bill to it, so i think this is currently underway and will be fully useable in just a few months, although im harding difficulty understanding what is USDT for ? or is that their Digital dollar ?

About dollars being digitalized, If they go live it would really cause them some issues including hacking and identity theft. So people, will probably switch to better unmonetized payments.

[omone1]

I have the same thought and conviction that central banks will develop their own digital coins, this impact of this pandemic is just too massive and humbling. It's even more expensive to manage fiat than managing digital coins. The fiat has a whole lot of bottle necks to deal with.

[naaimmd]

In times where social distancing is a must, the way we make payments changes in its entirety. Physical cash will cease from existence, as they serve as "carriers" or "vehicles" of the deadly coronavirus "COVID-19". Governments will notice that printing more money will not be worth their time, leading them towards the creation of their very own digital currency. That is if the pandemic continues extends long enough in order to have a negative impact on the world's economy.

Considering that everything has been moving to the "online world" lately, I believe that the coronavirus pandemic will pave the way for CBDCs (Central Bank Digital Currencies) quicker than we've expected. After all, it'll be much safer to conduct transactions online (and eco-friendly too) than doing so in the physical realm. Crypto will rise like never before because of this, leading towards the accelerated development of CBDCs.

While many countries like the US and Russia are skeptical about crypto/Blockchain technology, they might change their stance once they see it's no longer worth printing physical cash. China has already been working on a CBDC solution of its own, so it's only a matter of time before it starts rolling it to the public.

What are your thoughts? Will this be the era of CBDCs? Or is it still too early to tell?

You have solid points but we don't know for sure because in this situation people need cash more than anything so people are selling their asset and crypto was unstable as well even though now it's stable but we never know when it's become unstable again and who wants unstable crypto right? but I think major currency like USDT and other coins will be stable but since the government can"t trace crypto they are chance that government won"t get much tax which why they are approving crypto and crypto is one of way people are laundering their money. so you can see there are many reasons why crypto won't get CBDC but let's stay positive.

[hugeblack]

Of course, it will change concepts and may speed up the issuance of digital currencies, but it will not finish using cash or paper money.
the acceptance of new technology will not be fast, and therefore the alternative will be to rely heavily on bank cards, something that actually happened during the Corona crisis in South Korea and China^[1].

Do not forget that the transition to "online world" does not necessarily mean the use of digital currencies^[2], just as digital currencies do not mean that we may witness an increase in the demand for cryptocurrencies.

[1] https://edition.cnn.com/2020/03/07/tech/mobile-payments-coronavirus/index.html
[2] https://www.cnbc.com/2020/03/16/electronic-payments-look-more-appealing-as-coronavirus-spreads.html

[hatshepsut93]

Digital payments aren't perfectly sterile either - people touch their phones, then touch their faces and get infected easily. And cash isn't as infectious as people might think, WHO and other experts never claimed that it's a major vector for spreading this or any other disease. I believe the governments understand it and aren't likely to take any additional measures like speeding up the development of digital currency. This isn't something you want to rush, it needs to be well-tested and polished, and I think at this stage those currencies are merely proposals.

[carlfebz2]

Digital payments aren't perfectly sterile either - people touch their phones, then touch their faces and get infected easily. And cash isn't as infectious as people might think, WHO and other experts never claimed that it's a major vector for spreading this or any other disease. I believe the governments understand it and aren't likely to take any additional measures like speeding up the development of digital currency. This isn't something you want to rush, it needs to be well-tested and polished, and I think at this stage those currencies are merely proposals.

It would still pass on lots of debates and consideration before this plan would come true.Yeah, fiat now is considered to be one of the gateways of virus transmission but it doesnt mean that this would be enough
for government to switch up to digital payments in a blink of an eye.

There might be talks but it would still takes time and as said it would need to be polished first before switching into a whole new system.

[DooMAD]

I think it's going to be a couple more decades before we reach the abolition of cash.  There are still enough elderly people who are complete technophobes.  Some of them still want to pay for things by cheque.  People like that simply wouldn't cope.

[The Sceptical Chymist]

Physical cash will cease from existence, as they serve as "carriers" or "vehicles" of the deadly coronavirus "COVID-19".

I think it's way too early to be predicting the end of cash based on a single viral outbreak that so far hasn't proven to be extremely fatal.  Serious, yes, but there's no way to be completely risk-free as far as contracting an infection goes.  Physical cash has always carried the risk of being a fomite, if not for COVID-19 then other viruses that can certainly make you really sick.

So if cash were to be eliminated, people would still be touching keypads on credit card readers, doorknobs, and everything else.  I don't know, I'd hate to see this situation used as an excuse to do away with physical cash, because it's still the most anonymous form of money we have--and I don't think there's a compelling reason to.

[abhiseshakana]

- snip -
What are your thoughts? Will this be the era of CBDCs? Or is it still too early to tell?

From some of the explanations above, the point is that because physical money has the potential to become a coronavirus carrier, there is no alternative (TINA) besides adopting CBDC. At this time, cryptocurrency players should join this momentum to educate about cryptocurrency as an alternative payment media other than digital currency to be issued by the central bank.

[fabiorem]

Very likely to happen in the next two years, if things continue the way they are.

Consider also that they have been able to put tracking chips inside pills, which could store all the data from the person who took the pill. In this way, the centralized cryptocurrency could be authenticated through the signal from the chip, with a 5G smartphone acting as intermediary.

5G cover a wide range of frequencies, and above 20gHz it can pass through the pores of the skin (a process called "electroporation"), thus making a bridge between the 5G smartphone and the chip inside the body. The chip would confirm who is doing the transaction with the smartphone. If its the right person, then the transaction is confirmed, without the need of a miner.

Needless to say, these centralized cryptocurrencies will be PoS, not PoW, so governments would be able to manipulate the supply as they seem fit.

[TimeTeller]

I won't say it isn't time yet but I would believe it is an eye opener for the world. Who would have thought that cash would be considered as a contact agent in recent time ? I'm sure that many countries will loosen up from their strict rules on cryptocurrency.

I guess it is. Those countries that are treating crypto as illegal might change their stance now.
But CBDCs will take time to have really good progress in actual implementation.
But yes, this situation may pave the way for them to proceed.

[Abiky]

For the first time on such a scale, states are now taking measures to disinfect paper money in connection with the spread of coronavirus, and they themselves are urging people to use it less and switch to non-cash forms of payment. It is unlikely that the coronavirus pandemic will last too long, but the current situation will certainly contribute to the further crowding out of paper money and the issuance of nationally stable state coins. Figures have already appeared that about 70 percent of all states are working on the creation of their digital currencies of central banks. Many states have already noted the positive role of digital currencies compared to paper money, because every few years paper money must be replaced with new ones, and this is a very costly process. However, people, and even states, are not yet ready to completely switch to non-cash forms of payments.

Exactly. I don't see any other way but for governments to start issuing digital currencies for everyone's benefit. This can save costs, and reduce risks associated with carrying physical cash (germs, bacteria, not eco-friendly). The recent outbreak will greatly contribute towards the development of government-backed digital currencies as we speak. Already, the US has proposed a bill for a "digital dollar". On the other hand, China has been working extensively on launching a "digital yuan" of its own. As people become more interconnected in the digital realm as a result of social distancing from the virus, there will be an increase in the use of digital services worldwide.

The benefits of CBDCs relative to printing cash are numerous. The risk factor of transmitting germs or bacteria from hand to hand will be eliminated, as everything shifts to the digital realm. If governments want to "print" more money, they can do so virtually by increasing the digital currency's inflation rate or total supply. Banks worldwide will act as nodes or validators of the country's underlying Blockchain network. People will still trust CBDCs because they'll be backed by the full faith and credit of the government (just like it's the case with physical cash today). If the pandemic lasts for a long time, you could expect CBDCs to become a reality sooner than you've ever imagined.

you're probably right, the pandemic will accelerate things. south korea is burning cash as a public health measure, and the USA government is obviously embracing the idea of digital currency too. i'm not sure all these systems will incorporate blockchains though. they may just use trusted databases.

the stimulus bill they just passed in the USA actually included a provision creating the "digital dollar"---a central bank issued digital currency. they were planning on using it to pay out stimulus money, but it was stripped from the bill at the last minute. they are paying out stimulus funds via the IRS tax return system instead. https://www.theblockcrypto.com/linked/59692/digital-dollar-proposal-stripped-from-latest-house-democrat-coronavirus-stimulus-bill

It's odd that the US "passed away" from creating a digital dollar when other countries have already started working on digital currencies of their own. We all know that the US doesn't want to be left behind in technological innovation. Maybe the government is waiting for another country to officially launch its digital currency in order to begin development of a digital dollar?

Anyhow, I believe this pandemic will trigger massive development of CBDCs within the mainstream world. It'll be unsafe or unsanitary to use physical cash, leaving governments with no choice but to create digital currencies of their own. At least, the bill proposed by the US for creating a digital dollar is still there. If the pandemic lasts for long, you could expect the government to make the right decision by approving the creation of the digital dollar. This brings many benefits that are hard to ignore. For instance, bank transfers would settle instantly (instead of taking days) and fees would become cheaper like never before.

We'll have to wait and see what happens to the development of the COVID-19 outbreak in the upcoming days.