GLOBCOIN presented as a use case at the first ITU meeting on digital fiat currency
On the 12th and 13th of October 2017, a workshop on Standards for Digital Fiat Currency (DFC) was organised jointly by the International Telecommunication Union (ITU) and the Institute of World Economics and Politics at the Chinese Academy of Social Sciences (CASS) with the kind support of the Institute of Digital Money, the People’s Bank of China, the Chinese Academy of Information and Communications Technology and the Digital Fiat Currency Institute.
GLOBCOIN was presented during this meeting as an innovative use case of linking a managed basket of fiat currencies to crypto-tokens. The text of the paper contribution can be downloaded after clicking on this link here.
The paper underlines that there are solid economic reasons to introduce an optimized basket of fiat currencies, along the lines of the International Monetary Fund Special Drawing Rights, particularly for entities with global assets and liabilities or for individuals wishing to protect their purchasing power in a more and more global and multi-polar world. Up to now this kind of solution was only accessible to a few large institutions due to the structure of the foreign exchange market. The main original contribution detailed in the paper is to present the first use case of linking a managed basket of fiat currencies, namely, the Global Reserve Currency Index (GRCI), to a crypto-token, namely, the GLOBCOIN GLX. The tokenisation and the use of blockchain enables GLOBCOIN to make it accessible to any individual, gaining diversification while benefiting from good liquidity and low cost. After reviewing recent digital fiat currencies initiatives, the economic rationale of GLOBCOIN optimized currency basket is explained as well as its effective implementation by means of an existing blockchain-based distributed computing platform, i.e., Ethereum. The paper clearly shows that GLOBCOIN technological approach enables a wide range of uses of currency basket, which would not be possible without crypto-tokens.