BIS: Central Bank Digital Currency (CBDC) will Help to Stop the CoronaVirus Pandemic
Qucik Takeaways
- COVID-19 could be transmitted by cash
- Looking ahead developments could speed up the shift toward digital payments
The Bank of International Settlements (BIS) accepted the fact that COVID-19 can be transmitted via cash, it is a need to use online digital payments, an opinion in favor of Central Bank Digital Currencies (CBDC).
The worldwide outbreak of Coronavirus is a challenge to every nation to avoid transmission of COVID-19, it is necessary to use online systems for payments.
600 members from 60 nation’s central bank representatives of financial institutions suggested that CBDC as ” Hope of Light “, as human lives are very precious, use digital currencies for payments to take care and be safe at home.
Risk Via Credit Cards
After WHO’s warning that it is risky to do cash transactions, coronavirus transmission via notes could be possible, a big risk.
There is immediate change in people’s attitude and they are using online payments. BIS agreed with the WHO’s concern that there is a big risk of COVID-19 transmission via Credit Cards and PIN pads.
“Scientific evidence suggests that the probability of transmission via banknotes is low when compared with other frequently-touched objects, such as credit card terminals or PIN pads.”
No Demand For Cash In U.K.
“In past crises, demand for cash has often increased, as consumers have sought a stable store of value and medium exchange”, report note.
There is little increase in the use of cash in the U.S., the report said that the picture is not clear yet that ATM withdrawals are majorly falling down.
It means the COVID-19 effect leads towards maximum use of the digital payments method, as a concern, it is necessary to avoid cash use to percent the spread of coronavirus.
Report product’s that the outbreak could “lead to both higher precautionary holdings of cash by consumers and a structural increase in the use of a mobile, card and online payments.”
CBDCs could exclude unbanked and elderly
Current situations suggest that payments and operations operated in the Central Bank must be or could be processed like CBDC.
The report pointed out that there is a need to change the infrastructure of CBDC that also has a wide variety of shocks – “including pandemics and cyber attacks.” In spite of defending for a central bank digital currency, BIS suggested that keep away such and stay away from COVID-19.
“could open a ‘payments divide’ between those with access to digital payment and those without” — likely having a “severe impact on unbanked and older consumers.”
