Traditional cash could soon be a thing of the past. As we come to the end of Q1 2020, virtual currencies are becoming more prominent.
First came the shift from physical cash to cards, and now we are starting to see the change from cards to crypto. We are now in a situation where cash could soon become a relic of the past. But who is leading the trend in this paradigm shift? It’s Europe.
Cryptocurrency in Europe
Once considered a conservative continent, Europe is the one pioneering the way and embracing change. In Germany, card payments have now surpassed cash for the first time in history. This is due to health-protective measures in the EU, forcing people to reconsider their attitudes towards cash. In a post-COVID-19 world, we are likely to see people shunning money they have to touch, in favour of digital alternatives.
Additionally, half of all card payments are now contactless, compared to some 35% before the pandemic. Again this shows the trend of limiting physical contact. After the pandemic, it seems unlikely that people will go back to how they behaved before. While cash is unlikely to disappear tomorrow, the trend is most definitely there and it’s accelerating. Fast.
Another key factor in this growth is younger generations preferring contactless and digital payments. Convenience and a higher trust level in new technologies have contributed to these statistics.
Cash to crypto
By the end of 2019, the demand for digital currency had increased. In addition to this, governments had started to change their view of crypto and blockchain. They began to realise it’s not a phase that will blow over or something just for geeks. Instead, they are starting to see it as a prospective technology that can help improve the existing financial system.
Europeans are starting to accept that digital currencies are here to stay. Innovative technology such as AI, robots, drones and VR are becoming increasingly common in day-to-day life. This paves the way for digital currencies and crypto coins to be accepted more easily. No longer something out of a sci-fi utopia, these technologies are being recognised for the potential applications they have in many industries.
Malta was one of the first to pioneer cryptocurrency legislation. These laws created a legal framework that is designed to nurture and grow the crypto industry. Several other countries in Europe, and beyond, saw what Malta was doing and followed suit.’’
Portugal is also set to become another ‘crypto nation’. The nations Council of Minister announced they are working on a plan to create an innovation hub for emerging technologies. This will include blockchain and crypto- they would both be covered by national legislation.
The fact is, governments can no longer ignore cryptocurrency. There has been talking of a digital Euro and the Director of the European Central Bank has talked about the future of crypto. Christine Lagarde said the ECB wants to play an active role in cryptocurrency development. She added that crypto has the power to provide citizens with a means of exchange as fiat inevitably declines.
More than a trend
BitFlyer, one of the world’s biggest crypto exchanges said that 66% of 10,000 respondents in the EU said they think cryptocurrencies are here to stay.
This is also clear from the uptick in numbers of people buying crypto. Many companies and many of our clients allow crypto transactions and purchases. In 2020, it is expected that more will embrace cashless payments and switch to crypto instead.
It is safe to say that many of the concerns and doubts around crypto are fading away. We are living in a time where increased digitalisation is unavoidable and digital and crypto payments are a big part of this. These technologies are set to continue moulding the fintech landscape, in Europe and beyond.
Fast Offshore has a cryptocurrency and blockchain practice and assists clients in these areas. We can work on company incorporation, licensing, compliance, and ICOs/ITOs. If you have corporate needs for your blockchain or cryptocurrency business, contact us today.