How Cryptocurrencies Can Help with the Economic Crisis of 2020
It looks like 2020 has decided to seriously compete for the title of “Worst Year of the 21st Century.” Unprecedented fires in Australia, the threat of third world war due to events in Iran were complemented with the newly-appeared coronavirus which emerged from Wuhan, China. And while the first months were more or less peaceful the next months saw a huge outbreak in various European countries and the death toll has already surpassed 600,000 people.
The huge economic devastation which the virus brought was visible in different aspects of our lives. Markets crashed, prices increased significantly and a lot of people were left unemployed. The situation is still tough and some countries fear the second wave of Covid-19. It will be hard to return back to the pre-Covid world, and the economic situation for the rest of the period in 2020 will be hard for all of us.
However, cryptos could provide some help with the economic crisis and in this article, we will revolve around that topic.
Cryptocurrencies and post-Covid world
The role of cryptocurrencies and Blockchain will increase in the post-coronavirus world.
Given the devastating impact of the coronavirus pandemic, regulators around the world are increasingly turning their attention to cryptocurrencies and Blockchain technology. Data errors, downturns in international trade, and the inability to control medical supplies are some of the factors driving the move to distributed networks.
While we are talking about regulators and countries turning their attention to cryptos we should not ignore CySEC and FCA which were also severely affected by the coronavirus. Probably the most trusted and renowned regulators in the world of Forex, both of them had their word in regulating cryptocurrencies.
Japanese officials have also started talking about cryptocurrencies. Senator Otokita Shun, a member of the Nippon Ishin Party Financial Committee, shared his views on the role of cryptocurrencies.
Speaking with cryptocurrency traders in Japan, Sun announced that measures will be developed and improved to remove financial and tax obstacles that impede progress.
Open Blockchains allow you to verify and control the authenticity of data and any traceable assets. Cryptocurrencies, as an add-on, help to incentivize the operators of such networks and, in theory, contribute to the growth of trust and good governance.
Carlo de Meijer, the chief economist at MIFSA, also wrote about his attitude towards Blockchain and its existence after the pandemic. He believes China is using technology to mitigate the economic impact of COVID in the country.
Carlo de Meijer declared that they had launched immediate and emergency applications to combat the spread of the coronavirus in government offices, hospitals, universities and the financial sector. It is likely that during the second wave it will be once again in handy.
Ability to track and create value
Distributed ledgers can provide increased transparency during disease outbreaks, along with the international exchange of patient data, case histories and infection information. Countries like the UAE are already developing apps to track coronavirus among patients and citizens using blockchain-based platforms.
An open blockchain will allow instant data exchange and verification, preventing underreporting of infection cases. The Chinese government was criticized for incomplete reporting.
Cryptocurrencies such as Bitcoin and Ether are used as a global defence in volatile global markets, with the exception of Black Thursday in mid-March. Reports show that few Americans have spent incentive payments to buy cryptocurrencies, while Bitcoin options data is close to new highs.
Residents of Myanmar and Lebanon, despite the reluctance of governments, are using cryptocurrencies to transfer money and store savings. Examples like these increase the value that cryptocurrencies can create in developing countries.
Traditional investors like Paul Tudor Jones II are also investing in Bitcoin at a time when governments are artificially pumping fiat to save the economy.
While it is definitely that the world will not be the same after the crisis and it will not leave us, cryptos indeed have a huge potential to help the damaged economy stand on its feet and provide people with assistance.