COVID-19 PANDEMIC AND CENTRAL BANK DIGITAL CURRENCY AS THE FUTURE OF MONEY
Abstract
Coronavirus disease, which was first detected in Wuhan, has spread globally, causing coronavirus pandemic in 2019-2020. Coronavirus disease has caused concerns about viral transmission through cash, reducing the use of banknotes and coins and causing changes in the way of people’s payment system. This brought the introduction of the “Central Bank Digital Currency” as a new digital payment system, which is thought to be resistant to a wide range of threats. This article provides a comprehensive overview of Finance and Investment readers about the Central Bank Digital Currencies (CBDC). The interest in Central Bank Digital Currencies’ arises from the developments that started with the 2008 crisis, such as the emergence of cryptocurrencies and the rise of digital transactions and reduced cash use. Some large Central Banks are actively investigating the introduction of sovereign digital currencies. In this study, how the Central Bank Digital Currency can transform all aspects of the monetary system and facilitate the systematic and transparent execution of monetary policy is examined through the examples of E-Peso and E-Krona.
Keywords
References
- Angelakis, E., Azhar, EI., Bibi, F., Yasir, M., Al-Ghamdi, A., Ashshi, A., Elshemi, A., and Raoult, D. (2014). Paper Money and Coins as Potential Vectors Of Transmissible Disease, Future microbiology, 02, 249–61. https://doi.org/10.2217/fmb.13.161
- Auer, R., Cornelli, G., and Frost, J. (2020). Covid-19, Cash, and the Future of Payments. BIS Bulletin, 3, 1-7. https://www.bis.org/publ/bisbull03.pdf
- Barontini, C., and Holden, H. (2019). Proceeding With Caution - A Survey On Central Bank Digital Currency. BIS Papers, 101. www.bis.org
- Bordo, M. D., and Levin, A. D. (2017). Central Bank Digital Currency and Monetary Policy. Economics Working Papers, 17704. https://doi.org/10.2139/ssrn.3011401
- Norges Bank. (2019). Central Bank Digital Currencies. (2). Oslo. https://static.norgesbank.no/contentassets/79181f38077a48b59f6fbdd113c34d2c/nb_papers_2_19_cbdc.pdf?v=06/27/2019121511&ft=.pdf
- European Centre for Disease Prevention and Control. (2020). Coronavirus disease 2019 (COVID-19) pandemic: increased transmission in the EU/EEA and the UK. (7). Stockholm. https://www.ecdc.europa.eu/sites/default/files/documents/RRA-seventh-update-Outbreak-of-coronavirus-disease-COVID-19.pdf
- Fung, B. S. C., and Halaburda, H. (2017). Central Bank Digital Currencies: A Framework for Assessing Why and How. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2994052
- Lopez, G., Gerba, C., Tamimi, A., Kitajima, M., Maxwell, S., and Rose, J. (2011). Transfer Efficiency Of Bacteria And Viruses From Porous And Nonporous Fomites To Fingers Under Different Relative Humidity Conditions, Applied Environmental Microbiology, 79(18), 5728–5734. doi: 10.1128/AEM.01030-13
- PwC. (2019). Central Bank Digital Currency Benefits and Drawbacks. Birchstrasse, Zurich. https://www.pwc.ch/en/publications/2019/Central Bank Digital Currency_EN-web.pdf
- Sveriges Riksbank. (2018). The Riksbank’s E‐Krona Project Report 2. Stockholm. https://www.riksbank.se/globalassets/media/rapporter/e-krona/2018/the-riksbanks-e-krona-project-report-2.pdf