Banks along with the Government all around the world have been the financial power, the ones who issues, control and manages money, consisting of facilitating payments, custody, accounting, loans, insurance, credit card, debit cards and so forth. However, with the COVID-19 pandemic affecting various aspects and corners of human lives and the environment they live in. It has led many people to use cryptocurrencies due to the economical ramification it has brought, and this change has brought a driving adoption of cryptocurrency.
The National Banking System in Venezuela due to the present situation of the COVID-19 pandemic has brought an indefinite halt for the sudden quarantine. This has boosted or initiated increased utilization of the peer-to-peer cryptocurrency trading. Reports state that as the physical bank branches are closing, people are emerging to utilize digital asset trading.
COVID-19 threat has also impacted Petro - an oil-backed cryptocurrency. The listing of the Localbitcoins states that there has been offloading of the tokens at half by the Venezuelans.
Source: Coin.dance
The government of Venezuela hoped that the emergency steps taken by them would help to prevent the furthermore burden to the health system.
In South America, there has been an adoption of the crypto with Localbitcoins volume increasing almost by 30% in Peru and 15% in Colombia.
Source: Coin.dance Source: Coin.dance
Changpeng Zhao, the CEO of Binance had said,
“Binance is the world’s largest cryptocurrency exchange. In the first 3 months from inception, profits amounted to $7,500,000 USD. In the 2nd quarter, profits amounted to $200,000,000 USD. The 3rd quarter is still in progress, and is expected to have further growth. Any country that can attract Binance to open a branch in their location will receive a handsome tax income revenue.”
The pandemic is causing fluctuation economically across the world and its effects may stay for a substantial amount of time.
Cryptocurrency is not led by third-party and can be determined as public-issued rather than government-issued.
As per the report from KPMG, the central banks from Europe and Asia are working and on the stages to launch digital currencies for payment systems and cross-border transactions.
Arun Ghosh, The U.S. Blockchain Leader of KPMG said,
“In 2020, we at KPMG expect to assist regional and central banks in the development of well-defined technology frameworks that can anchor private-sector initiatives.”
Also, Dong He, the Deputy Director of the IMF’s Monetary and Capital Markets Department supported by saying, “and unlike bank transfers, crypto-asset transactions can be cleared and settled quickly without an intermediary.” “The advantages are especially apparent in cross-border payments, which are costly, cumbersome and opaque.” “New services using distributed ledger technology and crypto assets have slashed the time it takes for cross-border payments to reach their destination from days to seconds by bypassing correspondent banking networks.”
The Blockchain technology will primarily be utilized for clearance, settlement, cross-border transactions, insurance, AML, KYC, and trade finance by the services of the financial institutions.
Crypto Banks are also emerging in the market, it consists of engaging in crypto-related activities like saving, lending, borrowing, deposits, withdrawals, investing and so forth.
The term DeFi - Decentralized Finance is everywhere too. It enables people to utilize decentralized lending, savings, exchange, and for various other DeFi platforms.
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