Countries that want to provide their own cryptocurrency
Nowadays, when technologies can’t stop surprising us, everything becomes digital.
Countries that want to provide their own cryptocurrency
Nowadays, when technologies can’t stop surprising us, everything becomes digital. In recent years, digitalization has touched each sphere of our life, even financial, where we have observed the appearance of cryptocurrency. Thus, nowadays, virtual currencies like Bitcoin, Ethereum, or Dogecoin don’t sound geek to most part of the population. People follow the charts like CEX.IO cryptocurrency rates, trade, and exchange cryptocurrencies in order to get profit.
Surprisingly, even though cryptocurrency is supposed to be non-regulated by government payment methods, the authorities of some countries being against decentralized currencies agreed to issue the nation-backed ones to control all financial operations.
It seems that elaborating national virtual currencies may imply excellent benefits for its holders, like cashless payments or fast money transfers. As well, it may be profitable for the government in many ways.
So does national cryptocurrency already exist? Which countries are going to accept the new way of payments? Read on to get to know the advantages of digital money and to discover countries that are eager to provide their own virtual currencies.
Countries that already have their own national digital currency
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In 2017, Dubai was the pioneer city to launch the world’s first virtual currency backed by the government. The tokens are called Emcash. Emcash works on a blockchain and may be used for providing payments for different services. With Emcash, it is possible to purchase some goods, pay university fees or transfer money.
In 2018, following the UAE example, Venezuela brought to the world their national cryptocurrency called Petro. Markedly, Petro is backed by the oil and mineral supplies of the country.
Countries that are ready to issue their virtual currency
Being one of the cryptocurrency-friendly countries, Estonia is planning to launch state cryptocurrency Estcoin via token sale (ICO – initial coin offering), working on Ethereum. The founder of Ether, Vitalik Buterin, supported and encouraged such an idea saying that ICO inside the e-residency ecosystem might establish a powerful incentive coherence between e-residents and this fund, which could make e-residents feel more like the part of a community as there are more things they share in common.
All whilst, another European country, Sweden, is considering launching a state-backed cryptocurrency.
The new Swedish digital currency, E-Krona, will be used to achieve Sweden’s goal of going completely cashless. As a result, Sweden’s central bank, Riksbank, plans to introduce a similar digital form of cash in 2018 via the IOTA blockchain.
IOTA represents a popular cryptocurrency in the fully accessible decentralized market that is based on ‘Tangle,’ a directed acyclic chart data structure without chain, blocks, or miners.
Benefits of establishing national cryptocurrency
Infrastructure is a significant advantage of developing a strong national cryptocurrency. Electronic banking systems are difficult to design, ensure security, and uphold. This is totally understandable in places where fraud is common, and public officials take advantage of every opportunity to enrich themselves.
Cryptocurrency offers a free and open solution to the finance system. It simplifies and transparently tracks financial transactions, payment methods, and money transfers. Ecuador was one of the first countries to examine the nation’s digital money scheme in 2014. The case was distinctive because Ecuador’s national currency is the US dollar. The government electronic cash system, on the other hand, enables authorities to accurately control and establish monetary and fiscal policy for the entire country.
Estonia is yet another fascinating prime example. Estonia currently uses the euro, and Eurozone laws prevent any country from establishing a competing currency. Nevertheless, this country is a global leader in blockchain technology and digital authenticity. They intend to create an Estcoin with the value of the euro in order to enable transactions without actually trying to replace any euros.
The simplicity of exchange has been viewed as a major purpose for countries implementing national virtual currencies. Establishing banking relations in a relatively small country could be a disaster for an organization or strategic partner. Currency exchange and money transfer difficulties make global firms less likely to do business in countries with weaker economies. Cryptocurrencies have the potential to change this by attempting to make exchange easy, standardized, and entirely digital.
Tunisia’s eDinar and Senegal’s national virtual currency were both created for these purposes. Tunisia, in particular, described financial transactions in and out of Tunisia as a significant barrier for its residents, many of whom live abroad and transfer funds back to their families. In Senegal, authorities keep their fingers crossed to make digital currency a more efficient and appropriate way to trade among West African partner organizations.
Many countries see their principal aim in eliminating the necessity of using fiat money (cash).
Whereas some countries have been investigating and debating the idea of a cryptocurrency, several nations decided to make it official. Thus, China, Israel, Japan, and OAE have demonstrated a strong interest in developing a national virtual currency.
Moreover, the Marshall Islands officially established a national cryptocurrency called SOV (the Sovereign crypto) that was recognized as a legitimate currency.
National debt reduction
However, it is not stated in most documentation, the benefits of developing a digital currency that can be traded on the open market are powerful at the moment. The worth of a country’s national currency is likely to increase if it is listed on a major crypto exchange. With enough growth, the implementation of cryptocurrency could help many nations reduce their country’s debt.
CryptoEscudo, a Portuguese initiative, has set public debt a significant decrease as one of its currency’s objectives. Notwithstanding, it is not fully endorsed by the Portuguese government, and the project has been dormant for a certain period.
To sum up
Nowadays, more and more countries become digitized and thus got interested in cryptocurrency. To ensure that all financial transactions are legal and kept under control, governments agree to launch a national virtual cryptocurrency. The creation of a national cryptocurrency may not only eradicate money transfer obstacles between people living in different countries but also be a huge step to the new digital revolution worldwide.