Researchers at Deutsche Bank are predicting that in addition to the far-reaching consequences that the coronavirus pandemic will have on the global economy, it may transform how central banks interact with money, forcing a pivot to digital cash.
On April 3rd, Germany’s largest bank tweeted an image of a Bitcoin symbol at the center of a digital network linking several fiat currencies including the euro, the yen, the British pound and the US dollar.
According to the researchers,
“The COVID-19 pandemic is accelerating the rise of central bank digital currencies as many governments see the handling of cash as a potential risk factor. This will likely add to calls to move towards digital cash according to our Deutsche Bank Research colleague…
A once-in-a-century pathogen demands once-in-a-century solutions. An obvious place to start is to accelerate the inevitable shift toward digital cash.”
Deutsche Bank via Twitter
The bank’s researchers reference an article entitled The COVID-19 Cash Out, co-authored by Marion Laboure, a macro strategist at Deutsche Bank; Juergen Braunstein, a fellow at Harvard’s Belfer Center for Science and International Affairs; and Sachin Silva, a doctoral candidate and fellow at Harvard.
The authors of the cash-out report state that the pandemic’s silver lining could be a move toward ditching physical cash and adopting digital currencies.
“In fact, COVID-19 might turn out to be the catalyst that finally brings digital payments fully into the mainstream. Not surprisingly, the digital-payments industry is already focusing on the opportunities created by the crisis.”
The crisis is projected to steer Britain’s economy toward its greatest recession in a century.