Will COVID-19 and financial crises make cryptocurrencies more popular?

The coronavirus pandemic is transforming our attitudes towards money, but what does this mean for the crypto sector?

Electroneum CEO Richard Ells talked about whether digital assets can offer a compelling alternative to cash. He also mentioned the challenges the industry must overcome, and whether enough cryptocurrency projects are making an effort to meet regulatory demands.

According to Ells, cryptocurrencies are disrupting the entire financial landscape and reshaping the industry. Cryptocurrencies are a wake-up call for traditional banks, monetary systems, and authorities since they cut out intermediaries and endanger their control over financial services. Peer-to-peer transactions are possible at higher speeds and lower costs than ever with cryptocurrencies.

In developed countries, cryptocurrencies are too volatile to become practical as a means of daily payment. However, everything’s different in developing nations. According to Ells, Venezuela’s fiat currency is caught in a downward spiral and has depreciated dramatically against the US dollar.

People prefer to use cryptocurrencies instead of their local currency, and given the financial crisis, it makes perfect sense. Although digital assets are volatile, they protect consumers from inflation and devaluation.

Will the coronavirus pandemic make people turn to cryptocurrencies?

There is already evidence that the covid-19 has accelerated the adoption of crypto. Electroneum and AnyTask saw a large increase in new registrations between March and June.

Deutsche Bank recently published a study saying that COVID-19 has accelerated the evolution of coins and notes that can be touched to contactless systems, including cryptocurrencies. Cointelegraph recently published an article in which it claimed that the pandemic had led people to use alternative payment methods to avoid using cash.

Last month, Singapore’s DBS Bank said that large financial institutions in Europe are beginning to see renewed demand for cryptocurrencies. Its chief economist Taimur Baig said that global bankers believe that COVID-19 will accelerate adoption. 

Electroneum backs this up with its numbers. Between May and August, Electroneum saw about 7,000 new users in Brazil, more than 16,000 in Turkey, 8,000 in Nigeria, and 8,000 in India.