What COVID's Math Means for Digital Currency Adoption

For centuries, particularly throughout the 20th century, the solution to mass currency adoption was clear: wielding the power of the state.

Sure, every now and then a government would lose the confidence of its people and its currency would collapse.

Economic and geopolitical stress, combined with the opportunities posed by new digital currency and blockchain technologies, are creating the conditions for alternatives to challenge the global monetary system's dollar-centric sovereign structure.

To varying degrees, the different currency issuers and/or advocates must think not about how the state can or cannot compel adoption but how to best incentivize people to use their currency of their own free will.

If China is to meet its international currency adoption ambitions, it must entice foreign businesses and individuals to the DCEP. They're not like Chinese nationals: they can freely choose not to use the People's Bank of China's currency.

To win them over, Beijing will tout the new digital currency's high-tech, programmable benefits, including new efficiencies in supply chain management and other business processes.

While it's the independent Libra Association, not Facebook, that governs the digital currency, it remains unclear whether that structure is sufficient to assure the public's trust.

What of bitcoin and other more decentralized competitors in the currency cold war? What incentives and disincentives give cryptocurrencies a shot at viral expansion?

In her "Economic Equality" blog, a must-read chronicle of how finance impacts the kind of disparities described in the prior item, she first skewers the more centralized version of a central bank digital currency - the kind contained in China's DCEP. She worries about financial inclusion.

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