Central Banks’ Cash Quarantines May Prove Crypto Payments A Good Decision
The coronavirus pandemic continues to ravage the global economy. Therefore, countries such as China and South Korea have instituted cash quarantines as strategic measures to mitigate its spread. This decision follows the World Health Organization (WHO) revelation that cash is a key medium for the virus’ transfer.
Following The Trend
Hungary is the most recent country to follow the trend. Local reports indicate that the country’s central bank announced that it would be withdrawing billions of banknotes from circulation daily. The bank would isolate the notes for 14 days. The virus’ incubation period informs the 14-day quarantine.
German scientists have also recently shown that the coronavirus can survive on paper surfaces including banknotes for 4-5 days. Additionally, the virus can survive for up to 9 days on ATM cards that are predominantly plastic.
Need for Digital Payments
The pandemic has highlighted the need for digital payments. Examples include online payments and other digital methods. The WHO has encouraged their use in curbing the spread.
Cryptocurrencies find their importance in this scenario. In addition to their decentralized nature, they are widely accessible and enable cross-border transactions. As such, they are superior to fiat currency.
Globally, central banks are making progress in their issuance of centralized digital currencies. Examples that readily come to mind are China, Singapore, The U.S and Cambodia. Although activity on the CBDC front has waned, there couldn’t have been a better time to launch them. This reality is emphasized by the current strong need for digital payments.