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How COVID-19 spurred digital currencies adoption

Gary Gensler

TL;DR Breakdown

  • EIU’s report on how COVID made CBDC more attractive
  • Short history on the evolution of money
  • Data behind virtual currencies

Economist Intelligence Unit (EIU) has completed a report commissioned by Crypto.com revealing that the COVID-19 pandemic spurred the recent growth in acceptance of digital currencies.

Per the report, people have increasingly adopted cashless payment methods despite interest from governments on central bank digital currencies. China has led the CBDC race after it began working on the project since 2014.

UK, Japan, and Russia are now looking to embrace the technology, with the Bank of England and HM Treasury launching a task force earlier this year.

Jason Wincuinas, the EIU editor who spearheaded the report, explained that Money is rapidly evolving. He analyzed that years back. There was little commercial or popular support for even the idea of a digital currency. Within the past year, we’ve seen several governments announce new plans to create digital versions of their currencies.

The report highlights that cashless payment has been a trend before, but COVID-19 accelerated this move away from cash.

Evolution of Money before digital currencies

The basic idea behind Money is to be used as a medium of exchange. However, before Money came to be, man used to exchange via a system called batter. Trade by barter was a system whereby one person exchanges a good he has for an item he needs.

However, due to the many cumbersome problems with the trade system, cowry was introduced as a means of exchange before gold, metal coins and eventually fiat currencies.

Now, the world is moving towards digital currencies

EIU data behind virtual currencies

Last year when EIU published its first report on cashless payments, 72 percent of respondents said their country was likely to become a cashless society. This year that number has grown by 9 to 81 percent.

Similarly, the number of people who felt their countries would “never” become cashless societies fell from 28 percent in 2020 to 19 percent this year.

Also, the number of those who use digital means of payment rather than fiat have grown 22 percent last year to 27 percent now. In conclusion, over three-quarters of corporate treasury and institutional investor executives (76 percent) said COVID-19 accelerated the demand for—and adoption of—digital currencies.

Muhaimin Olowoporoku

Muhaimin Olowoporoku

Muhaimin loves writing on crypto news aside from being a crypto enthusiast. He has a knack for analysing issues and updating people on what's happening around the globe. He believes that blockchain and cryptocurrency are the most useful systems of mutual trust ever devised.

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