COVID-19 and Blockchain: the beginning of the end of cash

We are facing the most important challenge that we have had to face as a species in the last 100 years, a social and universal crisis that tests us as a species and that will undoubtedly provide us with a new critical and operational awareness, unprecedented in adapting to the new subsistence environment.

Major changes in history often stem from a systemic crisis. The etymology of the word “crisis” refers to the Greek word krino= to discern, judge, evaluate. Its positive meaning can be useful to experience difficult times as an opportunity for growth.

Let’s see where the change begins and how blockchain technology relates to the crisis caused by COVID-19.

Cash and contagion

The reactions of the states to the coronavirus are increasingly radical. The need to limit contagion places the quarantine on FIAT money or paper money, too.

As was seen in South Korea or China, precautions are of the most varied kind and are perhaps only the beginning of a historic change. Some banks disinfect banknotes by subjecting them to high temperatures, others use ultraviolet light and some even impose an appropriate quarantine on paper money. In the most extreme cases, they are destroyed to be replaced by a decontaminated series. Fan Yifei, vice-governor of the Central Bank of China, announced the measures days ago. This led to an extraordinary issue of 4 billion yuan in new banknotes for Hubei province.

After the declaration of the World Health Organization that confirmed that COVID-19 can remain in cash for several days, the electronic forms of payment have been recommended as the safest method against infection. Thus, COVID-19 has made cash disappear at the same time that the disease is incubated.

So what can we expect during and after this emergency?
Surely the exponential growth of digital money to replace cash. The path that many states have undertaken with proofs of concept and sandbox programming for the creation of digital currencies will accelerate, and will allow, in a very short time, the replacement of cash and allow digital transactions with liberating value for all civil and mercantile purposes.

What can a new society without cash give us?

The main challenges and threats that we will face are

• The reduction of our privacy.
• The social control and centralized management of data relating to the habits of citizens (control of clandestinity).
• The ease of confiscation and censorship of assets and transactions.
• The decline of individual freedoms.
• The centralization of power in the hands of some corporations.

If these problems are combined with the management of monetary policies controlled by a few people, which in turn have strong repercussions on the savings policies of citizens, there is a pressing need to find an alternative way of balancing this friction between the controller and the controlled, or rather between an elite and humanity as a species.

The difficulties we will face at the economic level will entail an exuberant and unlimited injection of liquidity, for a long time to come, which we hope will be with a commendable rigor and control, where will the resources be channeled to and who will pay the price for these emergencies, how can we trace and monitor that these expenditure items are used for the predetermined purposes and that there is complete transparency and traceability both of the awards and of the final destination of the products and services to which they are destined?

Public blockchains and crypto-currencies

A moment of crisis must be, in other words, a moment of reflection, evaluation, discernment, planning, strategy, and action that becomes a necessary prerequisite for the improvement and rebirth of a more promising future for our species.

Therefore, the crisis of COVID-19 imposes the need to take responsibility for the future of money and digital interactions between individuals. We must seek a balance between safeguarding our freedoms as individuals and neutralizing the effects of public authorities. In short, it is time to empower citizens more than ever, first because they need it and then because the state is all of us, and we must become aware of this and prepare ourselves to be able to demand explanations of the management and consequences of the decisions that have been, are and will be taken by our representatives, and they in turn, to provide them with the answers that we deserve to receive as citizens in a transparent manner.

Blockchain is a technology that allows to safeguard, monitor in time and preserve that this decision making makes sense, and that its scope and execution of measures is transparent, traceable in real time and that there is decentralization of this information and management. All public expenditure will have to be returned and we cannot simply accept any obligation to return if there has not been equal and transparent management and implementation for all. Another route would lead us to renounce the rule of law that we have worked so hard to achieve.

Blockchain, among other things, allows each citizen to have access to a digital form of money that allows him/her to exchange value when it comes to accessing the goods that are essential to overcome this temporary desperation and disruption of the financial market and the flow of capital in which we find ourselves. But we cannot overcome this challenge with technological advances alone; we need all payments and collections to be suspended immediately, and the flow of money to be replaced by a digital flow of subsistence, temporary and monitored, which prevents panic and despair from resulting in more terrible and irreversible consequences.

Blockchain allows, without any doubt, a new society with a system of control and audit in real time that makes us freer as a species, but, above all, that helps us to survive this challenge of the COVID-19 in an immediate way.