DBS Bank Claims COVID-19 Accelerated Central Banks' Interest in Digital Currencies

Singaporean multinational Bank DBS Bank in its latest paper on digital currencies has pointed out that the coronavirus pandemic has caused a “troubled and intrigued” dilemma for central banks around the world with respect to digital currencies and payments. 

The report noted that while central banks and monetary authorities stalled, private entities have adapted to government regulations to churn out tons of private tokens that have multiplied over time. Of all the digital currencies out there, the DBS Bank data shows Bitcoin’s massive lead against other altcoins.

In a way to wade off increasing influence by private firms, The Marina Bay-based banking giant acknowledged most central banks saw the need to fast-track their research and development involving digital currencies. This rekindled interest was necessary to “maintain control over money supply and transactions.”

“Central banks have led the way in money creation through digital means for over half a century. Today they are at once troubled and intrigued by the innovation and expansion taking place in financial technology,” the paper reads. Interest in digital currencies during the pandemic became more necessitated following the notion that massive stimulus payment in fiat currencies like the dollar can drive inflation. 

The DBS research stated that “..since central banks around the world embarked on an unprecedented expansion of their balance sheets to combat the COVID-19 pandemic-related economic headwinds, interest in cryptocurrencies, along with gold, has resurged.” This interest became pronounced in the US as Democrats proposed the distribution of the coronavirus stimulus funds to unbanked citizens using Digital Dollars (USDT).

Profiling Cryptocurrency Surge by Region

DBS Bank research also profiled digital currency adoption and usage by Countries. Asian countries led by China tops the chart. This project China as a pro-digital currency nation re-emphasizing China’s commitment to becoming the world’s leader in digital currency advances. The report noted:

“Asia is the world’s largest digital payments market, with China comprising almost half of the worldwide transaction value. Measured by traffic, liquidity, and trading volume, half of the world’s top ten crypto exchanges are in Asia.”

China’s dominance became imminent as the Asian giant recorded the establishment of about 10,000 new blockchain companies in the first half of 2020 despite the harsh bites of COVID-19.

This trend may likely not reverse in the coming months and years as President Donald Trump continues to show his lack of support for Bitcoin following his alleged instruction on the clampdown of the first-ever digital currency.

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