Technology has always been one of the key drivers of social transformation. In addition, there have been other reasons: conflicts, natural disasters, and crises, pandemics, and more. Speaking of this, the current situation of COVID-19, a once-in-a-century type of pandemic, has come at an inconvenient time. But the time has never been right.
However, what happened in late 2019 impacted various industries to a level that can hardly be estimated at the current moment. Losses and negative effects are inevitable, and the use of state-of-the-art technologies can shed some light during this time of impending gloom. Digital currencies, which had historically posed contentious concerns, today see strong interest from regular consumers and institutional buyers. 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 begun.
From old rituals to modern developments
Continuing changes in social experiences can become permanent, permanently transforming the environment. Human culture has become much more digitalized, and we see an unprecedented transition to a cashless world.
Ongoing developments, such as 5G tower rollouts worldwide, have sparked a rise in conspiracy theories and led to violent incidents of vandalism, as others claim they are directly connected to the latest pandemic. The growth of civilization has also been connected to a certain level of fear. The planet varies in its understanding of scientific advancement. While some countries in Asia, such as Japan, have always pioneered the technology and new developments, others have remained true to old traditions, barely embracing the changes brought about by growth.
Across Germany, the speed of transition has been boosted by the alarming number of disabled people. Ironically, ordinary things like paper money have turned into dangerous things that could lead to death. Cash-loving European citizens have continued to use more tickets. For example, Germans have moved dramatically to digital payments, as credit card transactions have been in the country’s history for the first time.
The virus has also caused a dramatic increase in the use of financial technology applications in Europe and around the world, as more people are now working or doing business remotely.
Besides, the path to mainstream crypto adoption has begun in a big way, as institutions have stepped in. The curiosity of the populace is also increasing. For example, a survey conducted by the European branch of the BitFlyer Crypto Exchange based on 10,000 respondents across 10 European countries showed that 2/3 of the local population thinks that Cryptocurrency is here to stay.
Leaving physical money
Incentivizing the participation of global players has also led to society’s transformation and the adoption of crypto. Now we can see that some people who have received help from the government during the pandemic have spent it on Bitcoin (BTC). Institutional investors are very interested in something that can shield them from risks, which means that more and more people should look at the crypto market over time.
The rise of the crypto market and the need for this new kind of money became even more evident in the spring of 2020. Bitcoin ATM locations have grown to more than 8,000 globally in the wake of the global crisis, institutional investors are moving to decentralized finance, and even the crème de la crème of finance, such as Paul Tudor Jones, see bitcoin as a tool for risk diversification, sending a clear signal to others.
The global view of crypto has changed from a “geeky currency for trading” to a “crisis-proof commodity.” Trust is hard to earn, and blockchain will deliver trust quantification at an unprecedented level.
It is clear that digital money is easier to use for any payment — an attribute that would never have been considered more than just a handy pre-pandemic feature — and stablecoins are the best tools that can be taken out of this particular box.
And stablecoins have experienced higher demand — Tether’s (USDT) market capitalization in the last few months has significantly increased, becoming the third-largest cryptocurrency — and this number is more than the amount issued between all of 2015 and mid-2019!
While we’re talking about controlled solutions to cryptocurrency projects, we don’t see much improvement. The attitude of the European Central Bank to stablecoins remains theoretical rather than a realistic call for action.
Regulators and the US Securities and Exchange Commission continue to obstruct blockchain platforms such as Libra and Telegram. While the latter has just left the game and lowered their weapons, the Facebook-led initiative’s fate remains unclear.
As for government-issued stablecoins, competition remains sluggish as China leads the race with the digital yuan program. However, the U.S. has encouraged creating its kind of digital central bank currency, as Congress has seen the introduction of a new bill that mandates the implementation of digital dollar wallets by 1 January 2021.
By mid-Spring 2020, central banks had proposed a ban on stablecoins when they called for the heavy-duty supervision of centralized, privately-issued global stablecoins and found decentralized ones to be forbidden. Although some countries support and promote creativity, others appear to be adverse to bitcoins, limiting, or absolutely banning bitcoin and crypto operations.
Finally, the European Central Bank is looking to renovate its financial system, exploring public and private options, with or without blockchain.
It is clear that the issue of distributed ledger technology is of interest, and technology is there. But Europe is a long way ahead of the US when it comes to stablecoins experiments that may be backed by government bonds. Regulatory agencies around the world love seeing private corporations play with this business model. It is possible to pave the way for its legitimization in the form of an e-money version 2.0.
The domination of digital assets is imminent
The coronavirus pandemic’s effect on the environment is difficult to evaluate, and the improvements caused by the pandemic are here for a long time to come. The Community must move on to digital solutions and virtual workplaces that will ultimately change the living world, moving from cash to card payments and from card payments to crypto.
Cryptocurrency technologies have become mature enough in 2020 to permit the purchasing of digital currencies with only a credit card, allowing small amounts of money to be sent even without the need for Know The Consumer Protocols. Stablecoin wallets are in high demand, and this obvious trend is no longer a millennial-only kind of thing.