The COVID-19 crisis has forced people to seek alternative technological solutions. Meanwhile, blockchain and cryptocurrencies become increasingly popular.
In the field of cryptocurrencies, everything changes faster than in any other industry. This is quite appropriate as they were born in the Internet age.
China currently leads the global digital asset initiative. The innovation train seems to move faster since the digital yuan (DCEP) has boosted rapid development in the field of blockchain technology.
Rather than waste time on regulatory uncertainty, the Chinese government has shifted its attention to benefits. Despite being the country of origin of the new coronavirus, which has had a huge impact on society and the economy, technological development has not stopped but has accelerated at an amazing pace.
McDonald’s and Starbucks are reportedly part of a group of 19 restaurants, retail stores, and entertainment companies participating in a test of China’s digital yuan. While the launch of the Chinese central bank’s digital currency seems to be a few steps from occurring, the world is hungry for digital money and FinTech applications.
New Trends Change the Digital Landscape
Apart from having a negative impact worldwide, the current COVID-19 crisis has also forced people to seek alternative solutions to avoid using cash. Bitcoin (BTC) and Ether (ETH) remain popular, but these assets are unlikely to become units of account. However, Stablecoins and CBDCs can be part of the solution.
The People’s Bank of China says that the digital yuan has exceeded the Libra concept in terms of key technical features, such as the option to process offline transactions on mobile devices. According to the institution, one of the objectives of DCEP is to internationalize the yuan as a method for making cross-border payments, without intermediaries that charge huge fees and take longer to process transactions.
In the past month, several central banks have announced plans to experiment with CBDCs. Earlier this spring, the Bank of France officially launched a pilot program for a digital euro, testing the integration of a CBDC for interbank settlement of payments. Meanwhile, South Korea’s central bank announced a very similar plan a week later.
Opportunities in the Post-COVID-19 World
The emergence of digitized national currencies is very close to occurring. Besides, after years of initial coin offerings and fraud cases, numerous illicit players have begun to leave the blockchain scene. For that reason, there comes a new wave of stablecoins and the opportunity for DeFi loans.
World markets collapsed and then fluctuated on March 12th due to the pandemic. In that regard, Coin Metrics’ studies show the increasingly important role of stablecoins amid rising fees and the expansion of margins in cryptocurrency trading. After the coronavirus outbreak began to affect global markets, the supply of stablecoins began to grow.
Tim Draper stated that the use of cryptocurrencies will become widespread within five years, not longer than that. They continue to grow in popularity, utility, and ubiquity. They are also ditching their exclusive niche for geeks since society already has enough technical expertise to fully utilize and adopt that solution. For widespread use, the world needs a more user-friendly and convenient interface that allows interacting with cryptocurrencies more often.
By Willmen Blanco