Will Coronavirus Encourage Countries to Issue Digital Currencies?

Will coronavirus push countries to issue digital currencies?

After the outbreak of the Coronavirus “Covid-19”, several countries started to take precautionary measures, including the implementation of virtual methods to combat the epidemic sideeffects.com.

It is well known that many viruses, including the Coronavirus, are transmitted through hard bodies, such as cash. This raises question whether the countries will think of using the digital currencies.

Accordingly, China has sterilized the bills by exposing them to ultraviolet light and sealed  them for a period ranging from 7 to 14 days before releasing them back to the market.

After experiencing such severe panic, the governments started to think of using digital currencies as a hypothetical alternative to cash.

It is worth noting that several people in China began to use online payment methods, to avoid touching coins or banknotes.

Fan Yifei, deputy governor at the People’s Bank of China, stressed that inter-county cash transfers were suspended to prevent the spread of virus.

In a press conference held in mid-February, Yifei said:

“We should ensure the safety and health of those using cash liquidity.”

WHO warns against spread of virus

The World Health Organization (WHO) has advised people to wash their hands and stop using cash if possible as the paper bills may help spread Coronavirus.

 In a related context, the Bank of England has announced that money can carry bacteria or viruses, urging people to wash their hands regularly.

Foreign currencies, ATMs may transmit virus

Some doctors and researchers in virology and infectious diseases have warned against foreign currencies that move from one country to another through expatriates.

On the other hand, the ATMs may transmit the epidemic as millions of people from different nationalities use them.

CBDC as alternative locally

Many central banks around the world have announced their intention to issue central bank digital currencies (CBDC).

Although the idea of CBDC contradicts one of the main objectives of cryptocurrencies, as explained in a previous report, it could be a good alternative in the status quo.

CBDCs have recently become one of the topics occupying the minds of those interested in the crypto space.

Role of cryptocurrencies globally

Being a cross-border asset is one of the advantages of cryptocurrencies, as they don’t need someone to transfer or get paid for the process, but in the event that the world governments agree on using them in transactions in all countries around the world.

Thus, there will be no need to carry coins or withdraw them from the ATM while travelling.

And this emphasizes the importance of cryptocurrencies, whereas the CBDC and some unencrypted cryptocurrencies can be traced and control, and therefore could be used locally, but after crossing borders this task could be difficult to accomplish.

Therefore, the best solution is using the cryptocurrencies, as it is difficult to manipulate or exploit the idea of crossing borders in hacking.

What can digital currencies offer?

Digital currencies can be used in all aspects of life, as you can pay invoices of all kinds, pay school tuitions, and even pay loan installments to banks, and many other forms in which currency could be used.

However, digital currencies will first limit interaction with others, as there will be no need for a collector, nor cash that is transferred from place to another, but it is possible if fully available, to cancel billions of coins, which occupy hundreds of meters, and at the same time is a mean of transmitting viruses.

Likewise what digital currencies can offer, signing smart contracts, as in currencies such as Apollo, NEO, Ethereum, and others.

Those contracts can cover all aspects of life in a safer way than paper contracts, and at the same time, they are cross-border.

They also include employment contracts, which many companies and organizations had to cancel, with employment process was limited to interviews and e-mails or other means of communication, which could be a way of rights’ loss.

Main challenges

The main impediment to the implementation of such an idea is that most countries are still afraid of the idea, and therefore it is not possible to use such currencies.

Could any Arab country takes the initiative?

It is well known to all that some Arab countries have made good strides in the path of using digital currencies, even some Arab real estate companies allow the installments or rental premiums in digital currencies.

Accordingly, the coming days may witness one of the Arab countries announce using digital currencies in transactions as an alternative to cash, and therefore the world will follow suit.

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Rabea Maguid 551 Articles
Rabea Maguid is a journalist completely obsessed with crypto industry. He holds B.A. from Al-Azhar University, and has a background in journalism and economics. Rabea Maguid likes to think about the future in a positive way, and sees blockchain as a potential driver of deep societal change.