BIS Calls for Central Bank Digital Currencies Amid Coronavirus Pandemic
BIS Calls for Primal Banking concern Digital Currencies Amid Coronavirus Pandemic
Amidst growing concerns regarding the transmission of COVID-19, the Bank of International Settlements is pushing for digital currencies.
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The Banking concern of International Settlements (BIS) has issued a report arguing in favor of central banking concern digital currencies (CBDCs) and digital payments amid the COVID-19 pandemic.
The bulletin published past the BIS, a 600-member international financial institution representing the central banks of 60 countries, urges central banks to consider developing CBDCs in light of concerns regarding the spread of coronavirus through existing payment methods.
BIS warns of COVID-19 transmission via credit card terminals
The written report notes a significant negative change in consumer attitudes regarding the utilise of cash in response to the Globe Health Organisation's (WHO) warning regarding the spread of COVID-19 via banknotes.
While the BIS echoes WHO's concerns, the study asserts that the run a risk of coronavirus manual through contact with credit carte terminals and PIN pads is even greater:
"Scientific evidence suggests that the probability of manual via banknotes is low when compared with other ofttimes-touched objects, such as credit card terminals or Pivot pads."
Demand for cash falls in the U.Thou.
The written report notes that "in past crises, demand for greenbacks has often increased, as consumers have sought a stable shop of value and medium exchange."
While the BIS identifies a recent increase in the circulation of cash in the U.S., the study notes that current data does "non nonetheless pigment a compatible picture" — with ATM withdrawals falling in the United Kingdom.
In the medium term, the report predicts that the outbreak could "lead to both higher precautionary holdings of cash by consumers and a structural increase in the use of mobile, card and online payments."
CBDCs could exclude unbanked and elderly
BIS anticipates that the current climate could lead to central bank operated payment infrastructures such as CBDCs apace gaining prominence.
Nonetheless, the study emphasizes the need for CBDCs to exist designed to withstand a wide variety of shocks — "including pandemics and cyber attacks."
Despite advocating for a central bank digital currency, the BIS warns that a motility away from greenbacks as a generally accepted ways of payment "could open up a 'payments divide' between those with access to digital payment and those without" — likely having a "severe impact on unbanked and older consumers."
Source: https://cointelegraph.com/news/bis-calls-for-central-bank-digital-currencies-amid-coronavirus-pandemic
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