As the world scrambles to deal with the health crisis and economic downturn, in the wake of the COVID-19, governments are rolling out financial stimulus packages to support those affected. Notably, the US government has announced a $2 trillion stimulus package that the people might get via cheques or get it picked up at the bank.
However, considering the present situation, such methods of package distribution come with the risks of contracting the novel coronavirus. People need the government to employ alternative ways that require minimum human interaction or physical touch so that can get access to their emergency payments, without the risk of getting affected by the virus.
Since we are living in the age of advanced technologies, make the best of it and distribute the money digitally in the form of stable coins? It is a sterile process where zero human interaction is required, the transaction happens digitally, the people will not need to leave their homes, minimizing contagion risks and they will get immediate access to the much-needed funds. The idea carries high value as it benefits both the government and the people.
Distribution of Stimulus Package via Stable Coins
The idea of distributing financial aid in the form of stable coins, might seem unlikely, however, with the right plan and spreading of awareness it can take a huge load of the government’s shoulder which at this point is already overworked.
Starting from social distancing protocol to remote working, in the wake of the latest health crisis, a lot of changes have happened in our lives and we were fast to adopt them. For people to accept stable coins as a mode of payment, the government will have to educate them about it works, how they can exchange the stable coins for fiat, and finally the ease with which they can perform online transactions, without being dependent on banks.
The Benefits of Using Stable Coins
There are several benefits of using stable coins as a mode of financial package distribution. We have mentioned a few below:
- Virtual assets can prevent counterfeiting and eliminate the risks of lost cheques.
- While some governments are planning to pay the amount in installments, stable coins can be put in escrow for release at a specific time.
- Once the assets are released, the individual they are addressed to, can send the amount to others and keep it themselves, without the need for a waiting period or any transactions fees.
- Stable coin transactions are faster than traditional cheque and banking methods.
- Since the assets get dispersed digitally, every recipient with access to the internet, proof of address and social security number (likewise in different countries) can get the stimulus aid fast and easily.
- The government can maintain transparency in the dispersal process and trace the payments through a Blockchain network. The designated regulatory bodies can keep track of the same.
- Through dispersal of stable coins, the government can save resources, that it would have needed to distribute cheques and prepaid cards. The use of traditional methods will require the proper and usual functioning of financial and postal services, which can lead to aggravation of the contagion.
- Virtual assets can connect to the banking systems without the need for deposits made in person. One can deposit the assets into the bank from an exchange.
- In an already ailing economy, it is cost-extensive to employ traditional methods to make the financial aid available to the people. Using a digital model can help the government save significant funds there.
On an ending note, it is fair to say that the use of stable coins might be an unconventional idea, but it may also pave the way for financial innovation and prepare the people and make them accustomed to a system that is transparent, free of human interference, maintains accuracy and enable them to trace their funds on an immutable network. That way, governments will not only be able to protect the health of the people, but also make help them adapt to an evolving digital era.