The effect of COVID-19 on Cryptocurrencies and Blockchain
Blockchain and cryptocurrency have great potential to help us, especially in these difficult times of the global coronavirus outbreak.
In March 2020, COVID-19 was declared a pandemic by the World Health Organization. Just over 8 months after this statement, there were almost 52 million cases of the disease worldwide and almost 1.3 million deaths.
While most pandemic stories involve astronomical costs in terms of human life and suffering, the disease has also revealed a number of problems in our global economic infrastructure. A surprising number of these weaknesses could be addressed or at least reduced with Blockchain technology.
As a result of COVID-19, companies around the world, including economically advanced countries, encountered supply problems for which they were unprepared. They were unable to collect and access important information quickly enough to quickly deploy available resources where they were most needed.
Blockchain technology and the pandemic
Solutions based on blockchain technology are already being implemented by a number of large companies due to lack and delay of information. Similarly, the resilience and adaptability of the offering are improved with blockchain technology. Because blockchain technology is probably uniquely suited for validating, securing, and transmitting data, it is ideal for resolving issues that have sometimes affected multi-party transactions, especially when these arrangements cross national borders.
In China alone, there are up to 20 blockchain-based applications designed to address COVID-19 that were launched in the first two weeks of February 2020. These new applications included online screening and a platform to support the proper management and allocation of COVID-19. supplies and aid for the most affected areas.
In the United States, there are many ways in which blockchain technology could improve the national response to COVID-19 and strengthen our long-term economic ecosystem. For example, blockchain platforms can improve the reliability, transparency and security of data, helping to resolve complaints that data has been manipulated or that its accuracy is compromised in other ways.
It could help track the spread of the virus by providing consistent, accurate and essentially real-time information. Follow-up of effective medical treatment. It could improve the management of health insurance. Use to facilitate compliance with the safety requirements of medicinal products when a vaccine is available for studies and distribution. It can also help with supply issues, especially since many of the goods that Americans are used to seeing on shelves here come from other countries.
Cryptocurrency and pandemic
Crypto assets also have a role to play. The pandemic has raised growing concerns about the extent to which governments and large enterprises use the data collected as a result of an increased virtual presence of most individuals.
In the US, the shortage of currencies has focused on the costs and inefficiencies of the conventional currency. Concerns about the extent to which the virus could persist on the surface of conventional currencies and banknotes has increased the momentum towards cashless transactions.
The delays and charges associated with the transfer of conventional funds have also attracted more attention. The situation of those who do not have a bank account has worsened. With around 1.7 billion adults without a bank account in the world, this can be a critical issue in times of economic hardship. Many of these problems, at least theoretically, could be addressed with crypto assets.
Different commentators have noted that the pandemic and the international response to it have significantly pushed the world towards an online ecosystem that includes digital financial transactions.
Consumers, adapting more and more to working from home, have been forced and willing to deal with the electronic management of financial transactions. Investment advisers and financial advisors also adapt to the "new normal" and recognize the potential of online tools and resources, including digitized financial investments.
Many national governments and central banks have turned their attention to centralized digital currencies. Another alternative that has been mentioned more and more involves stablecoins supported by the US dollar or the euro. Facebook Libra with its reduced plans to offer more options each backed by a local fiat currency, may be able to speed up this process.
And what could you ask? What are US regulators doing to support this type of innovative technology? It depends a lot on the agency that is being considered. The currency controller's office issued a letter in July 2020 clarifying the rules that allow national banks and federal savings partners to provide cryptocurrency custody services to customers. research and development on central bank digital currencies.
On the other hand, the Securities and Exchange Commission and the Department of Justice continue to actively enforce the requirements for the registration of federal securities laws in the crypto space. In addition to pursuing cases involving fraudulent offers, cases such as SEC v. Telegram and SEC v. Kik indicate an aggressive execution mentality even for legitimate transactions that do not comply with the often Byzantine requirements of available exemptions from securities registration requirements.
SEC Commissioner Hester Peirce has in fact criticized the SEC's actions in these cases as likely to push offshore crypto-entrepreneurs or in the Telegram case to completely stop viable, valuable and potential innovations.
The changing and challenging environment we are in, partly as a result of the pandemic that has not ceased to affect the global economic picture. It means that there is every reason to encourage blockchain-based solutions to many of our current problems.
From concerns about electoral fraud to problems with supplier failures and a lack of resilience to increased access to stable and secure financial transactions, blockchain and crypto assets have tremendous potential. Maybe it's time for our regulators to focus on encouraging the desired innovation in space, instead of expanding their regulatory area.
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This is wonderful the covid is one of the problems some countries facel