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Covid-19 has changed the way we interact with physical currency

Physical currencies are highly favoured for two reasons. The first being that it can be trusted, being a ‘hard currency’. And the second, using it allows consumers to maintain a level of privacy. However, Covid-19 has successfully shifted our attitudes in respect of handling physical banknotes and coins. Their use has caused major concern for the general public. It is almost impossible to keep any banknote or coin germ-free, and although the potential risk may be minimal, amidst the current pandemic a lot of people are more conscious of what they will and will not touch.

In general, I believe the average consumer is a lot happier using a card that they have had and maintain possession of to make all of their necessary payments. After all, it is a lot easier to sanitise your card then it is to clean a £20 note.

Some see the pandemic as the reaper of death for physical cash altogether, and even foreseeing decentralised digital payments to oust that of what we consider to be traditional centralised banking.

Charles Hoskinson, the Co-Founder of blockchain-based distributed computing platform Ethereum, recently commented on the benefits of a decentralised infrastructure.

“With a decentralised infrastructure in place, people would have 24-hr remote access to vital products and services. These services could be accessed from any location, regardless of potential transport disruptions or banks. Decentralised banking would also allow for quicker and cheaper international transactions. People working abroad, for instance, would be able to send money to family in other countries without fear of delays or inflated transfer fees.”

“Where 1.7 billion people globally don’t have access to a bank account, a large proportion of this population does have a cell phone.” Charles continues. “Using third-generation blockchains, we can extend financial services to these individuals who have previously been excluded from the financial system. Secure blockchain wallets can be accessed online or via cell-phones, and can grant users access to essential services without the middleman involved, democratising finance on a global scale.”

I agree with what Charles Hoskinson has said to an extent. However, this momentum is currently stagnating a little with some of the countries and their consumers that are most in need do not allow access to digital currencies – Qatar being just one prime example that jumps out at me.

Back in January the “Middle Eastern country said through the Qatar Financial Centre Regulatory Authority (QFCRA) that crypto asset services may not be conducted in or from the Qatar financial centre”.  This is a country that has many thousands of immigrant workers building stadiums and infrastructure for the Football World Cup, these people have little choice in the transfer method they can use now.  This affects the recipients in the actual value of the transfers they receive and when the workers are not getting a high wage to start with this reduction can be significant.

Beyond this current crisis, the global economy is going to take time to recover. By utilising the digital payments that are available, I believe people will be able to send funds to loved ones quicker and at a fraction of the price of the traditional carriers. There will be a lot of people around the world that rely on the support of family working abroad. With the lockdown in effect, many of these people will have either lost their employment completely or be on a reduced income. In my experience over 60% of the disposable income a worker receives is sent home, with a reduced or non-existent income this is obviously going to be limited. Speed and cost will be a driving force for getting this to them as quickly as possible.

This being said, the use of physical currency is not going anywhere in the short-term. There is a percentage of the community that does not have and cannot obtain a non-physical currency way to pay. Until this is resolved, then cash will be here to stay.


Written by David Carr, Co-Founder of Tap.Global

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