Due to the fear of physical cash as possible COVID-19 virus transmission people are now favoring cashless payment options, credit cards, and online transfers. The world would never have expected such a dramatic decline in demand for cash before the pandemic. A new BIS report, released on 24 August, focuses on CBDC research and development around the world, and indicates that interest in digital currencies by central bank (CBDC) has gained traction this year in the midst of the coronavirus pandemic
According to the report, central banks interest in central bank digital currencies has massively surged in 2020. Moreover, the in-depth report by BIS is inspired by more than 16,000 speeches from various central banks from the past few years. Besides, BIS also evaluates the available digital currencies models, and the reasons behind various nations exploring a CBDC.
Interest in state-issued digital currencies on the rise
So far in 2020, central banks all over the world have massively shifted their opinion towards issuing a digital currency. Notably, BIS comprehensively evaluated the interest in digital currencies over the years. The data collected by the bank for central banks that worldwide searches for state-issued cryptocurrencies has trumped those of Facebook Libra and BTC.
The facts support the report’s assertions that CBDCs have gained worldwide considerations in 2020, despite their concept existing for several years. According to BIS, when Facebook announced its Libra project last year, on top of the public sentiment towards the project was a precise watershed moment.
COVID-19 pandemic hastening CBDC development globally
As per the study, central banks acting on behalf of a fifth of the world’s population stated they were likely to issue CBDCs as of late last year. However, the number of central banks expected to issue CBDCs in the medium term (1-6 years) is now more than twice as much.
The critical ingredient in hastening this course, as per the report, is the dawn of the novel coronavirus pandemic. The new ways of living while maintaining the social distancing rules, the general worry that transacting in cash can transmit the virus, and the recent government-to-person projects have ignited the switch towards digital money. Notably, countries such as China,Sweden and Netherlands are highly prioritizing their CBDC research because of the COVID-19 disaster.