Deutsche Bank researchers predict that central banks will begin to use digital cash in the future as the economic consequences of the coronavirus grow.
Germany’s largest bank tweeted an image of a Bitcoin symbol connected to national currencies, including the euro, yen, British pound, and US dollar.
Among economies seriously threatened by the coronavirus, Great Britain could experience its worst recession in history. A record 13% drop in the economy could be experienced in the second quarter. The US already stands to lose mountains of value as money is pumped into its economy, further eroding the value of the US dollar. Central banks of the world’s most prosperous economies are at a cross-roads that will remould the futures of generations.
According to researchers at the bank,
“The COVID-19 pandemic is accelerating the rise of central bank digital currencies as many governments see the handling of cash as a potential risk factor. This will likely add to calls to move towards digital cash according to our Deutsche Bank Research colleague…
Deutsche Bank’s macro strategist, Marion Laboure suggests that a “once-in-a-century pathogen” calls for “once-in-a-century solutions”. With knowledge of this, the shift towards digital cash should be accelerated.
“A once-in-a-century pathogen demands once-in-a-century solutions. An obvious place to start is to accelerate the inevitable shift toward digital cash.”
Oil price wars further compound the confusion for economies and their central banks struggling through these unprecedented times. In Nigeria, many of the businesses listed depend on traditional infrastructure which cryptocurrencies do not depend on for value appreciation.
While coronavirus cases have not been as extensive in Africa, the international trading activities of its economies are at the mercy of the changes that policymakers make with respect to globalisation.