The coronavirus pandemic is changing the way we think about money – but what does this mean for the crypto sector?
We spoke with Richard Ells, CEO of Electroneum, about whether digital assets can provide a compelling alternative to cash, the challenges the industry needs to solve, and whether adequate crypto projects are making the effort to comply with legal requirements.
1. What do you think of the role of the cryptocurrency in the current economic landscape?
Cryptocurrency is disrupting the entire economic landscape and changing the industry. Cryptocurrency is a wake-up call to traditional banks, monetary systems, and governments as it alienates middlemen and threatens their control over financial services. Cryptocurrency enables inter-peer-to-peer transactions at faster speeds and at lower costs than ever before.
2. Isn’t the cryptocurrency too volatile to become an everyday payment method?
This may be true in developed countries, where economies are generally more stable than in developing countries. But let’s take Venezuela as an example. Their fiat currency, the bolivar, is stuck in a downward spiral and has fallen sharply against the US dollar.
People are choosing to use cryptocurrencies over their local currency, and given the financial crisis, it makes sense. While digital assets are volatile, they protect consumers from inflation and currency depreciation.
This also applies to Argentina, which was robbed of a bank in 2001 and is now threatened by another bank. The increase in the use of cryptocurrencies is more and more common in countries experiencing financial crisis.
The cryptocurrency market will become more stable after the rules are introduced and the industry matures. Volatility is definitely a problem in the crypto realm – except for the hoarding coins, of course.
3. Do you think the coronavirus pandemic will force more people to turn to cryptocurrencies?
There is already evidence that the Coronavirus has accelerated the adoption of the cryptocurrency. Electroneum and AnyTask saw a massive increase in new registrations in the middle of the pandemic peak from March to June.
Deutsche Bank recently published a study stating that COVID-19 has accelerated the development from coins and physical banknotes to contactless systems, including cryptocurrencies. The Cointelegraph recently published an article saying the pandemic has pushed people towards alternative payment methods so that they can avoid spending cash.
Singapore-based DBS Bank said last month that major financial institutions in Europe began to see renewed demand for cryptocurrencies, and chief economist Timur Page said global bankers believe that Covid-19 will accelerate the spread of the virus. Coinbase agrees.
Electroneum can confirm this with their own numbers. During the four months from May to August, Electroneum had nearly 7,000 new users in Brazil, more than 16,000 in Turkey, 8,000 in Nigeria and the same number in India.
During the same period, AnyTask’s user base doubled – from 245,613 people on May 3 to 514,855 people on September 6.
4. With the way we are all working in bouts of COVID-19 and more and more people are becoming independent, can cryptocurrency play a role in helping workers get a fair wage?
Crypto and blockchain can help make salary payments more transparent and therefore fairer. The Source Network is an example of this because it is used to prove that dozens of farmers are getting paid.
We live in an increasingly globalized world where people in South America work directly with clients in Africa, Europe or Asia. Blockchain helps track local wages to ensure workers are paid fair wages.
Freelance work is a completely different matter, as talented people decide the value of their work and set a price for their proposals. They will either raise or lower the price on demand.
On our part, as AnyTask managers, we don’t charge any fees or commissions from freelancers because we believe they shouldn’t pay up to a fifth of the revenue to websites that allow them to list their assignments. Instead, we charge a small fee from buyers. They are also fully protected because we offer a full refund if they are not 100% satisfied with the work they have done.
5. How would you rate the role of the cryptocurrency in promoting economic integration?
Encryption is ideal for achieving financial inclusion. Electroneum is a good example – we’ve created a mobile cryptocurrency that doesn’t require users to have a bank account, and our ecosystem is constantly expanding.
AnyTask is a major component of this ecosystem because it gives people from all over the world access to the global digital economy.