Many industries have seen a rapid decline to their growth due to the COVID-19 pandemic. However, the financial technology (fintech) industry has not missed a beat, in fact they have seen major growth in the last several months. The fintech industry consists of businesses that aim to use technology to offer novel financial services, as well as support existing ones. One particular financial technology that has been growing in recent years is digital currency. A digital currency is a type of financial currency that does not exist physically, but only digitally. Popular examples include cryptocurrencies and virtual money. These digital currencies have seen rapid adoption due to the presence of COVID-19. In this post, we will analyze the rise of digital currencies and look at examples of institutions that have been adopting these currencies and offer insight as to how businesses can capitalize.
Before now, digital currencies have been met with a lot of skepticism. In fact, JP Morgan’s CEO, Jamie Dimon, called bitcoin a fraud in 2017, a statement he says he now regrets. Barely two years later in 2019, JP Morgan had launched JPM, a cryptocurrency of their own. The best part is – it’s not just JP Morgan that is becoming a digital currency convert. Many companies are looking for ways to understand how cryptocurrencies can be implemented.
Cryptocurrencies Increased Popularity
Handling physical cash has become a way by which COVID-19 can be easily spread. The virus is known to stay on surfaces, including physical money, for up to ten days. Due to health concerns, the US Federal Reserve has been delaying dispensing cash received from Asia into the economy. Many governments have been going a step further by floating digital currencies of their own. The United States congress recently drafted a bill that could enact a digital currency backed by the central bank. The story is the same in Sweden as its central bank is running tests on its own proposed digital currency called e-Krona. The central bank believes that this will enable it to offer very low interest rates, well into the negatives.
The COVID-19 pandemic has shut down the amount of cash flow within the economy. A solution could be printing money to ease the crisis, however many institutions like the Bank of England are against the idea, as it could lead to spikes in inflation. This has led to the quick legalization of several cryptocurrencies in a bid to create financial value.
From Cards to Digital Wallets
Digital wallets are forecasted to be the most preferred mode of making payments after cards by 2025, according to Deutsche Bank. The global digital wallet market is also predicted to be valued at $2,100 billion by 2023. There is immense opportunity here for businesses, however they will need to prepare accordingly. Payment processors have to ensure they have a structure in place to accept cryptocurrencies, as retailers will most likely flock to those companies that can process digital currencies. Furthermore, banks have to be open to floating digital coins of their own and be able to accept existing ones. All of this will ensure a smooth transition to a digital currency age.
Moving to a Digital Currency Age
There’s a lot of data about cryptocurrencies out there, and, as a business or analyst, it’s difficult to keep abreast and filter the most worthwhile information. Nowigence has created an Insight Engine, Pluaris™, that comprehends textual data with human-like interpretive intelligence.
As an analyst, you can specify what topic areas you want to get intelligence on, and Pluaris will handle the rest. Nowigence offers concise text summarization and actionable data visualizations, providing insightful information to drive business outcomes. In the end, machines work faster, are more accurate, work 24/7, and save businesses countless man hours. Nowigence offers a Quick Demo of their product where you can see the advantage of automating business processes, all in one platform.