Bitcoin to Become Obsolete? Countries Are Launching Their Own Cryptocurrencies
When the price of Bitcoin jumped above $10,000, cryptocurrencies captured most of the economists and the media’s focus, which in turn, translated into an increase in their value. And even though we’re now witnessing a downtrend, the topic of blockchain and cryptocurrencies is still hot. What’s more, multiple countries have either expressed their intention to develop or have already launched their own cryptocurrency.
According to a CNBC report, Ecuador was the first country to have a government-run electronic payment system in 2015. The Latin American country uses US dollars as currency and developed its own Sistema de Dinero Electrónico (Electronic Money System) to support its financial system.
The reason behind this revolutionary scheme was to cap government spending at maximum $3million a year with exchanging old notes for new dollars as in comparison to paper-based money, virtual money is stored safely in mobile wallets. This allows residents to pay for services in the same way as they would with ‘classic’ money as well as pay their taxes.
Electronic money is after all “designed to operate and support the monetary scheme of dollarization”, as Diego Martinez, Presidential Delegate at the Board of Regulation and Monetary and Financial Policy pointed out.
2015 was a big year for Tunisia too, as the Tunisian government made the brave move to boost its eDinar digital currency using blockchain technology. This initiative was supported by the universal contracting platform, Monetas.
According to Johann Gevers, Monetas chief executive, the eDinar can be used to pay for goods and services, pay bills, make money transfers, and even pay for the renewal or issuance of official government identification documents.
In 2017, Senegal expressed its interest to follow Tunisia’s example and spin off its own digital currency. The Senegalese e-currency has the same value as the fiat one. Additionally, the CFA franc can be stored in all mobile money and e-currency wallets.
To support to government’s initiative, the Senegalese bank, Banque Regionale de Marches (BRM) and eCurrency Mint have joined forces to boost the eCFA.
According to an official statement from BRM and eCurrency Mint “The eCFA is a high-security digital instrument that can be held in all mobile money and e-money wallets. It will secure universal liquidity, enable interoperability, and provide transparency to the entire digital ecosystem in WAEMU (West African Economy and Money Union).”
In Europe, Sweden is looking forward to disrupting the current economic model and introducing a digital currency on the market – eKrona. The country’s central bank, Riksbank is behind the initiative. This is not at all surprising since the country is envisioned as one of the first countries in the world to go cashless after experiencing a dramatic fall in the usage of cash.
However, if the Swedish government decides to shift focus to the blockchain and roll out the eKrona, it will not happen too soon. There is yet a lot of work to be done before shifting to digital currency, Swedish economists suggest.
Another tech-friendly country, Estonia was among the first countries in the world to store data on the blockchain as part of its e-Residency program.
Having seen success with its revolutionary program, the country is now ready to take on a new challenge of launching its own cryptocurrency, called Estcoin.
The ambitious project of the Estonian government holds great promise, not only because it enjoys support from Vitalik Buterin, the Ethereum founder, but also because the government is also actively involving the citizens and e-residents of the country in the process by asking them to give feedback on how they think an e-currency could work in Estonia’s current economic setting.
According to Bloomberg, The People’s Bank of China has been looking into developing a Chinese cryptocurrency for quite some time.
Just like the Swedish, the Chinese are great fans of digital payments and mobile wallets like WeChat and Alipay.
In 2016, a bank’s official said that the central bank had been exploring the possibility of introducing an e-currency in the country and it would soon. The new, digital currency would use the blockchain to allow the bank to oversee China’s money supply.
However, unlike other countries wanting to use digital currencies alongside fiat money, China would go totally digital, replacing paper tender with cryptomoney. This would be similar to the demonetization introduced in India in 2016.
Russia was also revealed to investigate the possibilities of introducing digital currencies in the country. Olga Skorobogatova, the Central Bank of Russia’s Deputy Chairwoman expressed her confidence in the economic potential of digital currencies and the looming probability of cryptocurrencies becoming a standard for payments. That said, it would be interesting to see Russia adopt a crypto-payment model considering its past attempts to ban Bitcoin.
Proud no. 8, Japan needs no introduction as the blockchain’s mother country. According to the Financial Times, Japan is to launch its cryptocurrency in 2020 at the Olympic Games. The J Coin will be used in everyday transactions exactly like the Yen, only using smartphones.
The Japanese digital currency will be convertible into Yen on a one-to-one basis via the mobile app, using QR codes to be scanned in stores. Banks will be offering the service free of charge and will accept payment in the data they will collect on consumer spending patterns.
J Coin is also a way to beat the threat posed by the Chinese technology company Alibaba, which has recently launched mobile payments in Japan.
Amid economic crisis, facing dramatic food supply shortages and skyrocketing inflation, Venezuela is launching its own cryptocurrency. According to President Nicolas Maduro, the new digital coin named Petro will allow the country to “advance in issues of monetary sovereignty, to make financial transactions and overcome the financial blockade”.
Additionally, the virtual currency will be tied to the country’s resources – oil, gas, gold, and finally, diamonds.
No sooner than the end of 2017, did a source of the central bank of Israel announce that the country was considering introducing its own digital currency. This initiative has a double purpose: reduce the amount of cash used in the economy and set up a faster payment system.
The Israeli e-currency will most likely be centralized and strictly observe anti-money laundering rules and regulations, unlike Bitcoin and its peers.
The source told Reuters that the government may introduce the e-coin in its 2019 budget plan and economic package, should the government give their go-ahead. Keep your eyes wide open on the Bank of Israel!
11. Marshall Islands
The Republic of Marshall Islands announced its intention to launch its own cryptocurrency. The digital currency will be called Soverign, SOV, and will co-exist alongside US dollars.
On February 26th, the country’s legislators passed the Declaration and Issuance of the Sovereign Currency Act 2018. The purpose of this legislation is to declare and issue a digital, decentralized currency “based on blockchain technology as legal tender of the Republic of Marshall Islands”, the bill reads.
According to President Hilda C. Heine, the virtual currency will mark a new step forward in the nation’s liberty.
The underlying technology will be developed by the Israeli company Neema, using a protocol called Yokwe. The protocol will abide by anti-money laundering rules and prevent financial crime by linking accounts to government-verified identities.
The government intends to use its ICO proceeds to support its coffers ahead of the termination of US reparation payments, which amount to $30 million per year, intended to compensate the islanders against the damages caused by the US government using the site as nuclear weapons testing ground in the 1940s and 1950s.
Inspired by Venezuela, Cambodia expressed its intention to create its digital currency. According to a press release announcing the Blockchain Summit of the Association of Southeast Asian Nations, the Cambodian cryptocurrency will be called Entapay and will be based on the “quantum entanglement” of encryption and security. The cryptocoin will address all the basic economic needs of current buyers, holding a great promise to even replace VISA as a payment standard.
Comparing Entapay with the Venezuelan Petro, the press release highlights that in the same way that Petro aims to confer financial independence and put an end to the recession in the country, Entapay similarly strives to provide consumers and vendors alike with a fast and cost-effective way of handling payments over the blockchain.
These are economies embracing the blockchain model. Whether or not any of these digital currencies will dethrone the Bitcoin is premature to assume at this stage, but one thing is clear – we’re heading towards a token economy. Join us on Telegram to share your thoughts!