We Have Reached the End of the Paper Money Era! The coronavirus pandemic, which continues to affect the entire world, has also hit cash. Because of the coronavirus, many countries have begun shifting toward cryptocurrencies. Sweden has moved to a pilot for its digital currency e-Krona, while Japan, China, India and Russia are rapidly advancing their projects. In addition, the IMF meeting scheduled for April 2020 is expected to focus attention on cryptocurrencies.
After the era that began with Bitcoin, the cryptocurrency landscape is entering a new phase. Central banks have stepped in as states long kept their distance from Bitcoin on the grounds that cashless systems are risky. Driven by the coronavirus, trade wars and regional tensions such as those involving Iran, several countries have accelerated work on national digital currencies and have launched pilot programs this year.
Following the Bahamas, which launched its program last year, Sweden’s Riksbank announced it has begun testing the e-Krona. Cash usage nationwide has already dropped to around 1%, and the country aims for a full transition to digital currency by 2025. The pilot program is planned to run for about a year to measure public reaction. During testing, users will carry e-Krona in a digital wallet to make payments, deposit and withdraw funds through a mobile app. E-Krona users will also be able to pay using wearable devices such as smartwatches and card-based solutions.
Digital Currency Is at the Top of the IMF Agenda
Digital Currency Tops the IMF Agenda. Sweden is not the only country attempting to bring a central-bank-backed digital currency to market in the near future. Several nations have joined digital currency initiatives; Japan is among those stepping forward. The Bank of Japan is accelerating consultations on a digital yen with international financial institutions and central banks in Canada, the UK, Sweden, Switzerland and the European Central Bank.
Beyond Japan, China, Russia and India are also known to be continuing their efforts. The International Monetary Fund’s meeting planned for April 2020 in Washington is expected to put cryptocurrencies at the center of discussion. Reports suggest many countries will come together to raise the topic. At the same time, the World Economic Forum has announced the formation of a consortium to work on digital currency governance.
As central banks worldwide push forward with plans to adopt digital currencies, infrastructure development is proceeding in parallel. According to Bitcoin ATM Market Dynamics’ January 2020 report, ATM machines that support Bitcoin-style digital currencies are increasing in number in line with market trends. More than 400 new units have been deployed since January 2020. With these additional machines, the global count of crypto ATMs has reached approximately 7,000 units.