- Bank of International Settlements also known as BIS favored central bank digital currencies (CBDCs) as well as digital payments during the COVID-19 outbreak.
- This reports states that the transmission of the coronavirus is higher through contact with credit card terminals and PIN pads.
- The Bank of England has pointed out that the risk posed by use of a polymer currency note is no greater than touching any other common surface.
In a recent report issued by The Bank of International Settlements also known as BIS favored central bank digital currencies (CBDCs) as well as digital payments during the COVID-19 outbreak. The countries that have established the central bank digital currencies, the BIS call for its use.
The bulletin which was published by the organization (which counts more than 600 members in 60 countries) states the use of CBDCs by requesting the central bank to develop these digital currencies in light of recent spread of the coronavirus outbreak.
BIS notes the WHO concern, this reports states that the transmission of the coronavirus is higher through contact with credit card terminals and PIN pads. In simple terms the reports suggests that the outbreak could lead to a higher number of people holding cash just for precaution and also an increase in use of mobile, cards and online payments.
To strengthen trust in cash and guarantee universal acceptance, several central banks have actively communicated that risks are low of spreading of virus through banknotes. The Bank of England has pointed out that the risk posed by use of a polymer currency note is no greater than touching any other common surface.
BIS Researchers pointed out the use of CBDC
Researchers at BIS pointed out the fact of opening a ‘payment divide’ as if cash is not accepted as a means of payment then it could lead to a divide between those with access to digital payment and those without.
These researchers’ predictions are proven true by some politicians. Jorge Capitanich, governor of Argentina’s Chaco province, favored “digital currency transaction systems” that could rule out cash usage in a recent teleconference with President Alberto Fernandez in regards to the recent coronavirus outbreak. The word digital dollar also appeared numerous times in the U.S., even in the three different bills, including one by U.S. Senator Sherrod Brown. There have been talks of digital US dollars and Euros.
The impact of the coronavirus disease tells us the need for diverse payment methods, especially the one that will be contactless and flexible to withstand any sort of threat imposed as well as financial crisis.
Hence before the adoption of digital payments like CBDCs gains an upper hand, central banks wanting to create these kinds of virtual currencies to suit such ongoing crisis should ensure beforehand that payments are accepted globally and contactless.