The COVID-19 pandemic triggered a shift from cash to contactless payment methods. The crypto community immediately decided that bitcoins, Ethereum, and other crypto-assets are about to become an ideal alternative for financial transactions. But for a man in the street who does not understand how cryptocurrencies work, the technology may at first seem scary and inaccessible.
In connection with the spread of the new coronavirus, users massively refuse to use paper money in favor of non-contact payment methods that can be controlled without visiting a bank branch or using ATM. Among these methods are cryptocurrencies, which are convenient for conducting digital transactions.
Acceptance of cryptocurrencies by a wider range of users may be due to growing distrust to central banks, which launched quantitative easing programs and began to issue additional amounts of money to combat the economic consequences of the pandemic. People are looking for other assets to protect the value of their savings. The past financial crisis of 2008-2009, during which the world central banks behaved in a similar way, became fertile ground for the appearance of the first cryptocurrency, bitcoin.
The Bank for International Settlements (BIS) believes that the COVID-19 coronavirus pandemic will accelerate the widespread adoption of state-owned cryptocurrencies from central banks. According to the latest report published by BIS in April 2020, COVID-19 is changing people’s attitudes toward traditional cash. Analysts of the organization clarify that as a result of the refusal of payments using cash, a “stratification” of society can occur. The society may be divided into two large groups: those who are able to use cryptocurrencies and cryptocurrency services, and those for whom these technologies are too complicated, for example, the elderly.
According to analysts at Bloomberg, the crisis caused by COVID-19 will help ripen bitcoin as an asset. The first reason for the growth of the cryptocurrency exchange rate is associated with a fall in the stock and oil markets. In addition, the pandemic accelerated the transition from paper money to its digital counterpart, the report said.