Digital Money during Covid-19
Priyanka Patel

Digital Currency:
Viñuela, C. et al.(2020) – The world is entering in a new monetary stage. For almost 200 years central banks have provided cash as a credit-risk-free means of payment, but now is significantly declining in a few countries and at a not too long period of time we might face cashless societies soon. New digitalized enters or takes part into payment services and financial intermediation are also redesigned the monetary-financial landscape. Central banks properly addressed the rise of private digital currencies such as Bitcoin with just a study approach, since they do not pose any risk to the current monetary-financial system. However, Facebook’s report last year that it plans to launch its private-fiat-backed digital currency poses systemic risks to both the financial system and the monetary supreme power of most economies.

Monetary Policy:
Jorge-Vázquez, J. et al (2021) – The monetary policy of central banks in modern years has been characterized by the credit facilities they have granted to governments through the purchase of government bonds. In fact, this expansionary policy has been main element since the beginning of the 21st century. After the dot.com crisis and the terrorist attack on the Twin Towers in New York, the Federal Reserve (Fed) and the European Central Bank (ECB) lowered interest rates to avoid a deep recession in a delicate political scenario. Low interest rates coincided with the creation of the euro and many macroeconomic imbalances were generated during the period 2002–2007. Many investment projects were financed without a real savings base, especially in the real estate sector, until the bubble came to an end when interest rates rose and oversupply in this sector became apparent.

Bitcoin to Central Bank:
Paulo et al. (2021) – When people deals with digital currencies, the important issue is to prevent double-spending, i.e., the risk of someone using the same cash tokens more than once. Unlike physical banknotes and traditional instruments to hold bank deposits, such as checks, debit and credit cards, which are difficult to duplicate, copies of digital artifacts are typically easy to make and indistinguishable from one another, which is a concern for digital cash. Before Bitcoin, the most well-known attempts to create a digital currency was bring forward by American computer scientist – David Chaum. However, Digi-Cash (Digital Cash) and E-cash (Electronic Cash) employed a trusted third party to keep a record of all transactions, thus preventing users from spending additionally to their true balance.

Mobile Money Services:
Privacy policy analysis of banks and mobile money services in the middle east (2021) – Mobile money or mobile-phone-based financial service is a service that allows users to spend, store, or receive money using an account stored on their cell phones. Mobile money services differ from phone-based access to mobile banking (e.g., Bank of America mobile app) and mobile payment services (e.g., Google Pay, PayPal) in terms of targeted customers, services providers, and technology for supporting these services. Mobile money offers services to unbanked users as well as customers who have a bank account for some apps (e.g., STC Pay), whereas both mobile payment and mobile banking target only their existing customers. In addition, mobile money is often provided by telecommunication providers or local financial regulations, whereas both mobile payment and mobile banking are run by financial regulators. Mobile money services are supported by mobile Internet, SMS, or Universal Supplementary Services Data as part of phone’s configuration, whereas both mobile payment and mobile banking are activated only through mobile Internet.

Mobile Money Use:
Katusiime, L. (2021) – The growing respect of the importance of financial inclusion for economic growth and development has moved the subject up the development agenda in recent years (Aron 2018; Demirguc-Kunt et al. 2018; Di Castri 2013; Dipasha 2016; Kim et al. 2018; Lahaye et al. 2015; Katusiime, L. 2021). Although financial inclusion remains a global challenge, recent evidence put forward that mobile money can play a vital role in supporting financial inclusion, especially in sub-Saharan Africa (Demirguc-Kunt et al. 2018; Di Castri 2013; Katusiime, L. 2021). In spite of, uncertainties remain regarding the speed and nature of customer adoption and usage in the mobile money field which is relatively new although fast evolving especially in Africa. In a current survey of the literature in the context of sub-Saharan Africa, Ahmad et al. (2020); Katusiime, L. 2021, find mixed evidence on mobile money’s contribution to financial inclusion and economic development and conclude by highlighting issues that require further empirical investigation, key to which are the determinants of mobile money adoption and usage.

Bitcoin and Fiat Currency:
Gunay, S. et al (2021) – Among the countries which are highly active in the virtual currency market, China has always been the one that is most nearly associated with Bitcoin. Historically, China has been ahead of the curve, such as when the search engine giant Baidu, often tagged as Chinese Google, began accepting Bitcoin for its website security services in 2013. Although similar news of acceptance of virtual currencies on various fronts are common now, such as the recent formal public statement of Paypal’s integration with Bitcoin in 2020, a virtual currency approach at the scale as adopted by China has not been seen in any other country. China has also been an early entrepreneur in Bitcoin mining and continues to be a major contributor to global Bitcoin mining. According to Kaiser et al. (2014), “the mining pools managed in China did constitute 80% of total mining pools, and 74% of the hash power on the Bitcoin network is gather together under Chinese-managed mining pools”.

The South Sea Company:
Demmler, M. et al., 2021 – In modern years, examples of a new payment method, called virtual currencies, have become visible. Virtual currencies can clearly be interpreted as a new generation of money, given that their characteristics are fundamentally different from traditional currency systems. Within the huge variety of existing virtual currencies, the Bitcoin system can be identified as the most important one at present (Ali et al., 2014; Demmler, M. et al., 2021). The original idea of Bitcoin is quite convincing, since users of this system are supposed to realize national and international financial transactions in a more time and cost efficient manner than users of the traditional banking sector (Abramova & Böhme, 2016; Demmler, M. et al., 2021). However, recently, it is possible to identify a rapidly growing tendency of using Bitcoin as a speculative asset (Agosto & Cafferata, 2020; Demmler, M. et al., 2021). Especially during the period 2017-2018, this tendency even resulted in a behaviour of Bitcoin market prices that seems to be characterized by one or more financial bubbles.

Covid-19:
Çelik, I. et al (2020) – Our world has experienced many diseases, wars, and disasters globally and regionally since its formation. Those kinds of events have had some direct and indirect effects on humankind in the short and long term. Although, humankind has tried to minimize the effects of such events with the precautions taken, the effects experienced have been removed to some extent. Even if these effects disappeared or are eliminated, this has taken a great time. While the effects of regional disasters experienced in the past were felt particularly in that region, nowadays, the events and developments in any region of the world have direct and indirect global effects. Without a doubt, the fact that today’s world has become globalized and integrated has a significant share in this. Today, we are fighting the epidemic of COVID-19, which has and will continue to have global effects similar to those in the past. It is useful to give brief information about the epidemic.

Mechanism money:
Saikat, P. (2021) – The disease can spread through person to person through droplets of saliva, come from mouth or nose of a COVID-19 positive person during coughing or sneezing. Currency disinfection done previously is environmentally stable and viruses can resist the chemical disinfection. Not only the corona virus directly spreading through droplets but also the virus spreading through various surfaces, touched by corona positive persons and their hands get contaminated when they touch their mouth or nose after sneezing or coughing. There is a huge chance of spreading of the virus through money or currency because of the touching of currency notes and coins. Currency notes and coins play the role of vector. Currency notes and coins are passively spreading the contaminated disease. Basically, two types of paper currency used worldwide, one is cotton-based paper currency and another is polymer-based paper currency. Both types of paper currency used in various countries, some countries which are used polymer- based bank notes like Australia, Bermuda, New Zeeland, Romania, Vietnam etc., some countries used cotton-based paper currency like India, China, Bangladesh etc. In the country Mexico, both polymer and cotton-based bank notes are used.

The COVID-19 pandemic:
Gonzalez, L. et al (2020) – The current COVID-19 pandemic poses health and economic challenges for governments at all levels. Given the extent of the crisis, multiple policies will have to be implemented to reduce the negative effects of the crisis. The idea of a solution for the whole country is exactly used to the plurality of existing local institutions, including community development banks, but also cooperatives, micro-finance institutions, fin-techs and other organizations operating at the local level. Furthermore, technology is fundamental for leveraging policy effects during and in the aftermath of the crisis. Basic income policies during the pandemic face the challenge of making cash transfers in a quickly, easily and effective way and DCC (Dynamic Currency Conversion) greatly facilitate payment logistics.

Conclusion
Before Covid -19 the growth of money that is currency was rising because some people were uneducated and don’t believe in digital payment or digital money. Digital payment or digital money like google pay, paytm, bhim, etc., was not rising its growth level, as people were not accepted it because of lack of knowledge and information. They usually used currency in their regular basis and purchased many things with the help of cash rather than been digital. But when Covid- 19 came as we understood its weakness in the above points, people started using digital payment or digital money because disease can be transfer only, also so they have tried to learn about the digital payment and digital money method in lockdown by their family members. I think using digital payments or digital money is best option as we don’t lose our money, it save with our banks/phone, gives us offers/discounts, payments are done contactless so no chances of getting diseases, payments are done quickly and no one see our transactions its only between buyer and seller.

Reference
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