Seemingly, Covd-19 has given added stimulus to Central Bank Digital Currencies (CBDCs) which are ‘moving up the agenda’ for quite a number of countries (although no doubt the fact that China has now launched its own CBDC has not gone unnoticed). The risk of spreading Covid-19 has encouraged many merchants not to accept cash, and many shoppers have equally turned to going on-line for their purchases. Subsequently, this has resulted in the dramatic decline of ‘physical’ cash being used and made people consider that maybe a Digital currency could, indeed, be feasible.

In September 2019, European Central Bank (ECB) board member, Benoit Coeure, was reported as saying, “The bank should ‘step up’ its thinking on a public digital currency”. This was then followed up in November 2019 when the bank, itself, added, “The ECB and other EU central banks could usefully explore the opportunities as well as challenges of issuing central bank digital currencies including by considering concrete steps to this effect.” One suspects that this statement was, in no small part, fuelled by concerns regarding the threat of a private organisation, such as Facebook, which could thus undermine the influence and control that the ECB has over Europe.

There would now appear to be several European countries jostling to launch some kind of Digital Euro. Indeed, in Germany, the Association of German Banks (a group of 200 private German banks) has been asking for regulators to issue a Digital Euro. Holland and France have both been asking for a while to see a Digital Euro and now the Italian Banking Association (ABI), comprised of 700 Italian banking institutions, has also urged for the process of introducing a Digital Euro to be sped up. A statement from the the ABI reported that, “A programmable digital money represents an innovation able to profoundly modify the way we conceive currency and exchange. This transformation can potentially deliver a great added value, in particular in terms of efficiency for both operational and support process. This is the reason why is so important to dedicate attention and energies to develop, quickly and in collaboration with the entire ecosystem, new instruments able to primarily support the development of the Euro area”.

It is not singular to Europe that Digital Currencies are being taken more seriously. According to the Bank of International Settlement (BIS) there are 44 central banks seriously contemplating CBDCs. As the World Economic Forum stated, “CBDC may be issued for general use (“retail” CBDC) for peer-to-peer payments and payments from consumers to merchants; or for use by commercial banks and clearing houses (“wholesale” CBDC) for more efficient interbank payments that occur outside traditional correspondent banking and other payment systems”. Indeed, it has just been announced that in Thailand the authorities are proceeding with the launch of a CBDC. This announcement follows on from both the Bank of Thailand and Hong Kong’s central banks revealing in January 2020 that they had moved a step closer to issuing digital currencies that could be used to make payments between the two countries far more efficient than at present.

Siam Commercial Bank (SCB) believes it needs to become digitally sophisticated in order to meet the potential challenges from multinational organisations such as Alibaba, Amazon or Samsung Electronics. SCB has also signed an agreement with the Bank of Thailand. SCB has been working with Digital Ventures (DV), a leading fintech venture capital firm, since 29018 using DV’s Blockchain-powered platform for to speed up procurement, invoice, and payment processes for companies. The platform reduces procurement processing time by 50% and reduces cost per transaction by 70%. As a result, over 4,500 business partners are on this platform within two years.

Given the rhetoric in the recent release from the Italians, it is easy to understand why CBDCs are being embraced by governments: “A programmable digital currency represents an innovation in the financial field capable of profoundly revolutionizing money and exchange. This is a transformation capable of bringing significant potential added value, particularly in terms of the efficiency of the operating and management processes.” It is likely that CBDCs are to become more and more common place over the next few years especially now that China, the world second biggest economy, has already started trials with its own Digital currency.