National Cryptocurrencies: The Real Agenda
Countries jump on the bandwagon by introducing their own national cryptocurrencies.
Since mid-2017, we witnessed an upward trend of cryptocurrency projects, with up to 1600 cryptocurrencies in the market right now. Dubbed as the next big thing in the tech space, cryptocurrencies have pulled countries out of the sidelines.
Why do governments create their own national tokens?
Purpose of a National Token
An Economic Shield
Venezuela (Petro): With 90% of poverty and the highest inflation in the world, Venezuela is one of the worst performing countries. The socialist government of Venezuela has a bad reputation in the international stage, thus reducing financial aid.
To worsen things, various countries have retaliated over the policies of Venezuela’s President Maduro by imposing sanctions.
When Venezuela announced that they will launch a national token in 2018, everyone was surprised. Petro is a token backed by Venezuela’s oil and mineral reserves, and its intended purpose is for their government to outsource US sanctions and access international financing easily.
A Trade Catalyst
Russia (CryptoRuble): By engaging in trade agreements, nations are able to lower trade barriers like tariffs. The trade agreement helps to promote output and competitiveness of the export sectors of countries involved. Despite the reduction of trade barriers, the problems of transaction costs and cross-border payments still exist.
They are pain points of the business process.
In order to strengthen the commercial relationship between Eurasian countries, Russia proposed the CryptoRuble.
The CryptoRuble is a state-backed stablecoin that is equivalent to Russian’s fiat currency. It can reduce transaction costs and increase the speed of cross-border payments for countries in the Eurasian Economic Union (EEU): Russia itself, Belarus, Kazakhstan, Kyrgyzstan and Armenia.
Russia’s CryptoRuble takes the national token a step further by making it an international medium of exchange in trade alliances.
A Digital Frontier
Estonia (EstCoin): Known as the “Digital Republic”, it's no surprise that Estonia is integrating blockchain technology with open arms. In its efforts to stake its place in the crypto world, Estonia attempts to offer its citizens a national token, EstCoin.
However, as Estonia is part of the Eurozone, only Euro can be used as the national currency in the country and the European Central Bank (ECB) states that they will reject any attempt for countries to create a new national currency.
Therefore, despite the support from Ethereum’s Co-founder, Vitalik Buterin, the EstCoin is not an official national currency.
A System Connector
Dubai (Emcash): Back in 2017, Dubai made history as the first country to implement a national token. Dubai facilitates the move towards a cashless society with Emcash being widely used for government and non-government transactions such as utility bills and everyday food purchases.
Emcash is pegged to the UAE dirham, the local currency of Dubai, and it works as a hedge against volatility in the crypto market. With Emcash, users have a faster and cheaper way to process transactions.
Tunisia (eDinar): The eDinar is a collaboration between the Tunisian government and Monetas, a blockchain payment platform.
eDinar enables Tunisians to transfer money, pay their bills, secure their official government-issued documents and much more. It also provides financial inclusion for those unbanked, with 600,000 users already making payments with eDinar. That is 20 percent of the 3 million Tunisians excluded from the financial system!
More Nations Onboard
Many other countries can explore the idea of a government-backed national cryptocurrency to help them evade sanctions, ease accounting and reduce costs.
National cryptocurrencies can pave the way for the trading of other cryptocurrencies on more regulated exchanges, eliminating all scam exits and providing greater accountability.
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