COVID-19 Incentivizing Crypto and Leading Mainstream Adoption
Crypto is a place where everything changes faster than in any other industry, and seeing as it was born in the age of the internet, this is quite fitting. Today, China is leading the global digital asset initiative. The train of innovations seems to go faster as the digital yuan (also referred to as DCEP) has fueled rapid development in the field of distributed ledger technology.
Instead of wallowing in a swamp of regulatory uncertainty, the Chinese government shifted its attention to benefits. The Chinese have not wasted time, and despite being the country where the new coronavirus started and has since made a huge impact on society and economy, tech development did not stop, but rather accelerated at astonishing rates. Reportedly, McDonald’s and Starbucks are among a group of 19 restaurants, retail shops and entertainment companies taking part in a trial of China’s digital yuan, part of a pilot program prior to a wider roll-out of the new digital currency. While the Chinese central bank digital currency seems just a few steps away from launch, the world is starving for digital cash and fintech apps.
New trends reshaping the digital landscape
The ongoing COVID-19 crisis has not only had a negative global impact, but has pushed people to seek alternative solutions to avoid using cash. Bitcoin (BTC) and Ether (ETH) are still popular, but such assets are unlikely to ever become units of account. Stablecoins and CBDCs can save the day, though. The People’s Bank of China stated that the “processes of top-level design, setting industry standards, developing potential functions and integration testing” were “almost complete.”
Moreover, the PBoC says that the digital yuan has outpaced the infamous Libra concept in terms of major technical features such as the option to process transactions offline on mobile devices. It’s also stated that one of the goals for the DCEP is to promote the internationalization of the yuan as a way to make cross-border payments without the need to involve intermediaries that charge a huge fee and take a considerable amount of time to process such transactions.
In the last month, we’ve seen several central banks announce plans to experiment with CBDCs. Earlier this spring, the Bank of France officially launched an experimental program for a digital euro, testing the integration of a CBDC for interbank settlements, while a very similar plan was announced by South Korea’s central bank a week later.
There is plenty of room to expand the use of digital assets, and there must be no poor guidance. So, how can crypto improve daily life?
Trend 1: Revamping payments and remittances
Blockchain technology is used to reshape remittances and provide instant transfer solutions, raising the bar for the apps we use. From the local to the global cross-border level — fast and cheap payments are now in higher demand than ever, and cutting-edge solutions that provide a smooth experience can make a difference and contribute to the rapid adoption of digital assets.
As fintech is blooming globally, top-notch apps have appeared on the horizon. For example, an app developed by the Switzerland-based company Aximetria enables users to make transactions in crypto and traditional currencies in one app while enjoying zero commissions. Clients can use the app regardless of citizenship and place of residence. Other mobile solutions such as the Coinbase wallet provide smooth crypto experiences, offering a safe gateway to crypto for institutional investors.
Trend 2: Providing a better technology layer
The pace of all processes, including blockchain, may speed up drastically due to constant blockchain developments and updates. In addition, the crypto sector has been cleared up since 2017, after many malicious actors stepped into the scene.
The whole movement will be faster as DLT revamp many areas — from food and clothes manufacturing to complex international logistics, areas that are ever more important to the world since COVID-19 has ravaged manufacturing and logistics.
Trend 3: Ensuring global transparency
We can’t afford total freedom, as it mostly stays the dream of crypto-anarchists. CBDCs will be issued sooner or later, tied to government control, but transparency here lies in the fact of the inability to manipulate and defraud, so corruption will naturally decline. Even state administration will become an effective tool because we will see how funds will be spent.
Recognizing opportunity in the post-COVID-19 world
The emergence of digitized national currencies is closer than we think. Moreover, after years of initial coin offerings and cases of fraud, numerous illicit actors started leaving the blockchain scene, and as such we see the advent of the next wave led by stablecoins and the DeFi lending opportunity.
In addition, as world markets crashed and then fluctuated wildly as a result of the pandemic on March 12, Coin Metrics research points out the increasing role of stablecoins amid growing commissions and expanding spreads in cryptocurrency trading due to the turbulence. After the outbreak of the coronavirus began to affect global markets, the supply of stablecoins started to grow.
We’re going fast on our crypto learning curve. Tim Draper’s famous statement, which claimed that crypto will be mainstream in five years, no longer seems viable, as it will happen in a much faster timeframe. We will be able to buy much more than a latte. Crypto continues growing in popularity, utility and ubiquity, shedding its geek-only niche, as society is already tech-savvy enough to utilize and fully embrace such a solution. What we really need right now to go mainstream is a less sophisticated but more user-friendly and convenient interface that can enable people to interact with crypto more often.
To survive means to adapt. During the last few months, the world has changed drastically. We have realized the benefits of everything that can be done remotely. Online conference rooms have become a trend, as has the ability to work from the comfort of one’s sofa or a new home office area, even if hastily thrown together. It’s all rapidly improving due to the necessity of staying at home — now no longer the luxury of a few.
An example is the crypto-based emergency app Guardian Circle, which has seen a huge surge in downloads due to the coronavirus crisis, resulting in a monthly growth of 2582% for the three-year-old app, which had struggled to attract attention in the peacetime of a pre-virus world.
Microsoft’s latest data shows the rise of remote work has led to a skyrocketing increase of 775% in the usage of the brand’s cloud services in regions that have implemented social-distancing rules. For example, the Zoom app is currently in higher demand than ever before, with JPMorgan analyst Sterling Auty noting third-party data that indicates its daily usage is up more than 300% from before the pandemic forced workers into their homes.
Moreover, the trends taking place or emerging nowadays in our current reality will have a high impact on the world of post-virus aftermath, changing the landscape of work and communication, as Zoom’s CEO Erik Yuan pointed out. The need for physical workstations and the idea that work effectiveness depends on a physical presence is already becoming a relic of the past.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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