October 23

Is COVID-19 Driving Growth in Digital Currencies?

Following the outbreak of Covid-19, many governments and citizens saw digital payments as an effective way to conduct transactions while reducing the risk of spreading the virus.

For example, in Kenya, the central bank waived fees for financial transactions completed via mobile banking, while in Myanmar the government sought, where possible, to distribute one-off payments to vulnerable citizens through local digital platforms such as Wave Money and OnePay.

At the same time, many private e-commerce and online delivery platforms experienced rapid increases in traffic, as the pandemic forced companies to improve their online and digital offerings.

Central banks go digital

As a result of this shift in payment preferences, monetary authorities around the world are increasingly looking at central bank digital currencies (CBDCs) as an alternative way to make transactions in an increasingly digitalised world.

Unlike cryptocurrencies, CBDCs are not a new type of currency, but rather a digital form of hard currency that is backed and issued by the central bank.

Photo courtesy of Tai’s Captures.

Source: Oxford Business Group (link opens in a new window)

Coronavirus, Technology
digital payments