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Are We Moving Towards Digital Currencies?

Updated: Aug 19, 2020

| August 18, 16:49 GMT | By Ismail E Esat

In light of the current COVID-19 crisis, the digital and cryptocurrency market quietly rises. There has been much talk about the world advancing towards digital currencies as an alternate payment method to cash, or even a long-term replacement. And one thing the current crisis can teach us is that cashless methods are slowly being implemented. One big example was the decision for several business to stop cash transactions during this time. Even though this does not point towards any sudden change, it does indicate positivity towards a move in this direction within the future. The increase in contactless transactions as well the size of these transactions all points towards us moving to a digital cashless future.

Cryptocurrency Surge

The recent weeks has seen an incredible rise within the cryptocurrency market. Bitcoin being the largest cryptocurrency has seen an incredible rise of over almost 17% with the value of the dollar decreasing following speculation of U.S. monetary and fiscal stimulus risks collapsing.

Prior to the outbreak and global lockdown in March, Bitcoin’s value against the Dollar fell significantly from $10,000 to a low of $3800. Bitcoin had been narrowly trading between $8500 & $10,000 for the past three months which is the longest the asset has been without any substantial movement. With the recent pandemic, it was expected that investors would flock to safe-haven assets which saw the value of Gold rise reaching highs of $2000. However, the current time outlined that the cryptocurrency market may not be the safe-haven it was once believed to be.

The highlighted area shows the decline in the value of Bitcoin in March, when concerns of the COVID-19 pandemic rose, and a global lock-down was initiated. Since then, Bitcoin has recovered outlining a 210% gain.

With Bitcoin now lurking around the $12,000 mark and positive news continuing to add up within the industry, market sentiment is on the rise and predictions to reach previous highs of $19,000 seem achievable.

Visa & Mastercard Make Bold Moves Within The Crypto Market

The leading giants within the global payment industry have recently outlined their stance with regards to cryptocurrency payment systems. Both Visa and Mastercard have made strong statements in support of the use of cryptocurrencies and their support could go on to lay the foundations for adoption on a global scale.

Mastercard have already made encouraging steps by promoting its cryptocurrency card program, encouraging exchanges and payment service providers to enrol. In the meantime, Visa have also outlined their vision with regards to the Crypto Industry. In its recent blog, the company stated that “digital currencies have the potential” and there vision is to “help shape and support the role they play in the future of money”. These statements are also supported with moves by both companies with large crypto exchanges such as Coinbase and Binance using Visa and Mastercard payment platforms to support their services.

Visa & Mastercard could pave the way for further Cryptocurrency Growth

Visa has also been developing their own independent projects which includes investments within Anchorage, a tech firm that specialises in the building of security infrastructure for the cryptocurrency ecosystem. In addition, they have also been heavily involved in shaping policies and regulations within the industry. Their partnership with the World Economic Forum has led to developing recommendations for central banks which looks in detail at cases for central bank cryptocurrencies. However, Visa declined to comment any further.

According to Josh Goodbody, the director of European and Latin American Growth and institutional business at Binance, he believes traditional banking cards are the “bridge between crypto and traditional finance,” adding: “Crypto debit cards provide a tangible and friction-less way to spend your crypto, and it provides users with the ability to incorporate crypto into their day-to-day lives.”

Goodbody believes that the mainstream financial Firms have a key role:

“Visa and other networks’ willingness to work with the blockchain industry is a very positive vote of confidence for the further adoption of cryptocurrencies. Not only are traditional technology providers facilitating adoption, they are actively participating in the development of the ecosystem. We see this as an opportunity to further the adoption and accessibility of cryptocurrencies.”

One thing we can ascertain is that the Cryptocurrency space is going to significantly grow. With major institutions and payment exchanges offering support and positivity, a move towards a digital cashless future is not a question of if, but rather when.

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