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COVID-19,the pandemic we are experiencing now has made some people nervous about handling cash which makes Banks throughout the world are disinfecting cash either banknotes or coins before they back it in circulating due to the fact it might transmit the corona virus.
With the fact that the deadly COVID19 are now spreading across the world some Banks and Nation are trying to find an alternative route to raise there economy without handling the traditional cash to avoid the potential infection of the COVID19 through its own banknotes.
As the coronavirus continues its march around the globe, the World Health Organisation (WHO) has warned the general public that paper banknotes may be spreading the infection, according to The Telegraph.
“Customers should wash their hands after touching banknotes because infectious Covid-19 may cling to the surface for several days,” the WHO said.
Per the health organization’s statement, people should try to use contactless payment methods—where it’s possible—to prevent the coronavirus from spreading.
According to The Telegraph, the Bank of England has said that banknotes “can carry bacteria or viruses.” In fact, some banks provide hand disinfectants and even Geiger counters to their employees who are regularly involved with cash.
This was the most reason why some country creating and issue there own digital currency or used already the alternative that exist already which we all known as crypto currency.
The Federal Financial Supervisory Authority (BaFin) of Germany has officially defined cryptocurrencies as financial instruments, providing further regulatory clarity. This makes it easier for those spending cryptocurrencies and will give some relief to businesses built around them.
According to the translation of BaFin’s press release published on March 2, cryptocurrencies are now classified as the “digital representations of value” that have the following characteristics:
Not issued or guaranteed by any central bank or public body;
Don’t have the legal status of currency or money;
Can be used by individuals or legal entities as a means of exchange or payment;
Serve investment purposes;
Can be transmitted, stored and traded electronically.
The document also notes that cryptocurrencies are not to be confused with various types of “electronic money” which have other sections of the law dedicated to them.
The new classification was based on definitions written by other regulators worldwide, such as the Financial Action Task Force. BaFin also clarified that prior to this, cryptocurrencies did not fall into any of the generally recognized pre-existing categories in Germany.
Every Norwegian now owns some Bitcoin—albeit indirectly and a tiny amount.
This is because the Norwegian government's pension fund holds a 2% stake in US software company, MicroStrategy, and MicroStrategy just bought a lot of Bitcoin (around $425 million.) So, every Norwegian citizen now indirectly owns $1.72 of the cryptocurrency—without even knowing it.
Norway’s government owns the so-called "Oil Fund," which with $1 trillion in assets is the world’s largest sovereign wealth fund.
The state-owned Oil Fund owns assets around the world and the stake in MicroStrategy makes up only a tiny part of the pie.
But because of its choice to invest in a tech company, the government has indirectly invested in the world’s biggest cryptocurrency (or rather, exposing its citizens to the whims of the cryptocurrency market).
Torkel Rogstad, a Norwegian software developer at crypto-research firm Arcane, created a calculator to track it. He told Decrypt that the government indirectly owning Bitcoin could set an interesting precedent.
“Government seeks to maximize profits, and through that they picked up some bitcoin exposure,” he said. “I expect them to get growing bitcoin exposure going forward, through more companies buying Bitcoin.”
He added: “Down the road, maybe governments would buy bitcoin directly? Not surprising if that happens, as governments now hold gold.”
The Norwegian government isn’t even that Bitcoin-friendly. In 2018, the country’s government ended electricity subsidies for Bitcoin miners.
The British central bank’s governor, Andrew Bailey, said at a public Q+A session today, “it is hard to see that Bitcoin has what we tend to call intrinsic value,” adding, “It may have extrinsic value in the sense that people want it,” reported Reuters.
Bailey has long trashed Bitcoin, which is the largest cryptocurrency by market cap. In a speech to the Brookings Institute last month, he said that cryptocurrencies “have no connection at all to money.”
During a UK parliament select committee hearing in March, Bailey repeated the same claim: that while Bitcoin has no intrinsic value, though may have extrinsic value. He said, "If you want to invest in Bitcoin, be prepared to lose all your money."
However, Bailey is bullish about stablecoins, which are cryptocurrencies pegged to some real-world asset, such as the US dollar or the British pound. He said in last month’s speech, “Stablecoins could offer some useful benefits. For example, they could further reduce frictions in payments, by potentially increasing the speed and lowering the cost of payments (particularly if global stablecoins were to be established),” he said in the speech.
He said these digital assets could complement a central bank digital currency—essentially, a state-rolled crypto, “either as distinct payment options, or with elements of the stablecoin ecosystem, such as wallets, providing consumers with access to a CBDC” could be an option.
For some reason our beloved crypto currency is getting some warm welcome treatment (recognition of the government) at the same time getting cold treatment (prefer not to use).which is there some institution and nation that prefer to use the CBDC -Central Bank Digital Currency.
The Bank of Japan stated that it would start conducting research in the following financial year on how to develop and operate its CBCD.
A local government official in Japan has said that the country needs to rapidly amend its central bank laws to allow the Bank of Japan (BOJ) to issue a national digital currency. Kozo Yamomoto, the Liberal Democratic Party lawmaker, stated that the central bank of Japan is at risk of being overtaken by private firms, which could unveil their own virtual currencies that could undermine the Central Bank Digital Currency (CBDC).
Yamomoto stated that he would push the relevant agencies as well as the government to accelerate efforts to revise the BOJ laws to enable the central bank to issue a CBDC.
He has been a visible advocate and vocal for creating changes to the BOJ law that defines the roles and responsibilities of Japan’s central bank.
“If something too convenient pops up from the private sector, people might start to doubt whether they need yen as a currency unit. We must prevent this from happening. This is fundamentally about protecting Japan’s currency sovereignty.”
He said that making revisions to the laws to incorporate virtual currencies would make a significant opportunity to add other changes like introducing job creation and an inflation target to the central bank’s responsibilities and roles, as a similar scenario like the U.S federal reserve.
“The new law should also clarify that 2% inflation is the BOJ’s policy target.”
Currently, Japan’s central bank set a 2% annual inflation target, a law that was enacted in 2013 with an aim to help the nation to control deflation. However, the central bank has not enshrined the target in the BOJ law, which states that its responsibility is to ensure that national financial systems remain stable and prices move.
Central banks across the world have been assessing the strategic objectives. The European central bank wants to set a scene for a change of strategy in which it could follow the U.S Federal Reserve to aim for a 2% inflation target in order for periods when prices increase too slow could be compensated for a faster rise at another period.
On Friday, the BOJ stated that it would start conducting research in the following financial year on how to develop and operate its CBCD.
Yamomoto complained that the timeframe of Japan’s central bank was “too late”, saying that the initial phase of experiments should start during the current financial year to March 2021.
“I don’t think we need to worry about any financial stability risks from issuing CBDCs.”
Central banks started to closely examine digital currencies at Facebook social media giant announced that it would issue its own Libra cryptocurrency that would be backed by a combination of major fiat currencies and government debt.
Japan has not been having rapid plans to launch a national digital currency due to economic disruptions and social uncertainty it could cause in a country that has the most cash-obsessed people in the globe.
China has maintained steady progress towards launching its national digital currency, a phenomenon that has influenced the government to rethink and promised in its policy platform of this year to examine more closely at the idea of a CBDC.
With the current rapid technologies that transform the Fintech sector, other leading central banks also have speed up their research on national digital currencies.
As you can see right now the crypto currency is giving a lot of impact this day where there is a fear about handling cash which we could say now that we already enter on a new era of cashless economy which is already been adopted by the major leading country USA, Europe, and even China.