A Journey to the World of National Cryptocurrencies
Have you ever thought about our future? We mean, us as cryptocurrency enthusiasts, traders, investors, developers, etc. Will we live in a decentralized world without traditional bank systems? Or will we remain odd geeks who’ve lost their chance for the largest financial revolution ever? In Superorder, we think that the answer depends on current governments heavily. They are the kings and they can decide.
While we can discuss regulations and legal restrictions for hours, let’s instead look at the friendly countries that tried to make their own coins!
Relations Between Crypto and Governments
Anyway, it’s impossible to understand the idea of a gov cryptocurrency without legal aspects. Some governments consider cryptocurrency a huge threat to central banks, others think it can provide beneficial opportunities for partners. Here are popular thoughts:
- Votes for: wider coverage of the underbanked population, attractive investment opportunities, general liberalization of monetary systems.
- Votes against: uncontrolled and volatile nature, potential disruption of central banks, crime concerns, new challenges.
Anyway, even crypto-friendly countries think that national digital currencies are risky initiatives. But there are a few nations that have introduced these projects. Note that they feature different types, not only traditional DLT/blockchain-based cryptocurrencies.
Famous National Currencies (Not Only Crypto)
In general, well-known fiat currencies and new crypto coins are similar. All of them are barely backed by universal assets. Instead, they rely on trust. Even more, dollars and euro may be based on gold reserves but none of these currencies/materials have real value. Yuval Noah Harari proves that we trust in the currency because the whole humankind agrees that this concept has value. Imaginary value.
Nevertheless, while a lot of gov representatives blame Bitcoin in isolation from reality, the minority decides to investigate the topic. Let’s look at their results.
1. Auroracoin (Iceland)
Well, it’s difficult to name Auroracoin (AUR) a truly national currency but it was the first project designed for citizens of a particular country. An anonymous developer or a group of developers launched Auroracoin in 2014 as an alternative to the local krona. Coins were distributed between registered Icelanders. Reportedly, only 10% of them have ever grabbed their share. Later, the government even called Auroracoin a scam.
Current state: the coin’s price dropped heavily and its official site evolved into the Icelandic Blockchain Foundation.
2. China Digital Currency (China)
Probably, China is the most controversial nation when it comes to cryptocurrency. Originally, it blamed blockchain and Bitcoin total scam but recently made the U-turn. Today, officials even remove and ban all anti-blockchain mentions! Experts think that the most possible reason is a trade war with the USA followed by decreased investors’ interest. Other info includes Alibaba and Huawei involvement plus concerns in true decentralization.
Current state: the currency is under development now and may be launched in May 2020. No official info is available.
3. E-krona (Sweden)
Another planned project has more chances to be widely adopted. Swedish central bank called Riksbank has introduced the project of a national digital token — e-krona. As for now, it’s unclear which tech realization Sweden will choose. Some experts think Riksbank will cooperate with IOTA, for example. Anyway, we know that citizens use digital currencies more and more often so e-krona should be demanded by clients.
Current state: Riksbank is studying the need for e-krona, the project’s challenges, the required legal changes, and so on. We should expect the launch around 2021.
4. emCash (UAE)
Dubai is known as one of the most innovative cities in the world. Local government builds the ecosystem of the future based on data and, particularly, blockchain. In 2017 and 2018, world media reported about the first state-controlled crypto in the UAE — emCash — that should integrate into emCredit and emPay systems. Some agencies even mentioned a successful launch. But there’s no official info on the mentioned platforms.
Current state: despite huge attention and innovativeness, Dubai doesn’t disclose information about emCash. It seems that it’s still under development.
5. Estcoin (Estonia)
In 2017, Estonia revealed plans on the development of a national token — estcoin. There were different rumors in which the most optimistic enthusiasts said about euro replacement. Today, things are less global. Estonia confirms that it never thought about making a national cryptocurrency as it’s understood generally. Instead, the government plans to create a utility token for the e-residency system exclusively.
Current state: estcoin hasn’t launched yet but Estonia is working on it. Media even reports about potential national ICO!
6. J-Coin (Japan)
Again, the Japanese digital coin can’t be named cryptocurrency. It’s a specific token with a 1:1 ratio to yen that is used in the payment ecosystem created by a local bank — Mizuho — in partnership with other financial institutions. J-Coin helps people to facilitate money transfers and purchases. However, it has no relation to blockchain or distributed ledgers at all. The system is centralized.
Current state: J-Coin Pay by Mizuho is active. Customers can freely send and receive money using the official app.
7. Petro (Venezuela)
Yeah, you waited for it. Petro or El Petro is the most famous national cryptocurrency launched by the Venezuelan government in 2018. Nicolás Maduro imagined this oil– and mineral-backed coin as a way to avoid American sanctions. Petro is fully controlled by the government and has no access to exchanges at all so it may be the most isolated cryptocurrency in the world.
Current state: in Venezuela, Petro is alive and active. Bolivar is pegged to this cryptocurrency that is pegged to oil… Sounds weird, we know.
The Future of Gov Crypto
It seems that true cryptocurrencies are incompatible with governments. The world rulers want to control everything. Crypto communities want to be independent. We can’t expect great demand because gov coins come with all the risks of traditional crypto but without privacy or freedom. The only viable hybrid is digital currencies that don’t pretend to be crypto, though.
Thankfully, our world is highly diverse today. Different approaches and economies compete to find the most sustainable way to develop. And this is true for cryptocurrencies, as well. For instance, we definitely know that the American Federal Reserve isn’t going to deal with national crypto at all while Switzerland studies this idea with close attention. Which strategy will win? One can only guess.
