State backed cryptocurrency is being seriously considered now by at least 3 governments around the world.
Most people have heard of Bitcoin, many will know about the recent price increases, but as it stands, the vast majority of regular people on planet Earth have no idea of the real impact cryptocurrency is having on the world!
It’s been hard to ignore recently, with the Bitcoin price constantly hitting new all time highs. The other lesser known ones such as Ethereum, NEO and OmiseGo have also done very well, making anyone invested in them unbelievable gains.
Governments around the world are now looking seriously at the implications cryptocurrency could have on their economies and the world at large.
The problem is that governments act and make decisions slowly, whereas the cryptocurrency market moves at previously unheard of speeds! In a global, user controlled world, things move at incredible speeds, and regardless of their stance, governments have a huge challenge on their hands.
Whether their stance is to try crack down and stamp out the problem, or they’re looking excitedly at the benefits the new technology could bring, they have a long way to go and must think very carefully about how they approach the matter.
The Chinese government decided to try to crack down on the growing market, focusing mostly on the Initial Coin Offering (ICO) market. They outright banned organisations from selling cryptocurrency tokens as a way of raising money this September, followed quickly by an announcement that all Bitcoin exchanges operating within the Countries borders must cease trading.
That’s certainly one way of dealing with the problem, but other countries have taken an entirely different approach.
3 Countries considering the launch of their own state backed cryptocurrency
The new booming market is impossible to ignore, and these 3 Countries are embracing the changes full on! By backing their fiat currency to a cryptocurrency token, they hope to lead the way into the digital cash future so many believe we’re heading into. They see a future where cash is a thing of the past, and everything is done digitally with complete transparency.
It’s of little surprise that Japan are taking the new technology by the horns. They’ve been at the centre of technological innovation for decades, and it seems they’re keeping up the trend.
When it comes to new and emerging technologies, Japan have always been one of the first to embrace it, and this time is no different.
They plan to create their own cryptocurrency called the J-Coin which will be pinned to the Japanese Yen, and users will store and spend them using their mobile device.
The plans have been announced by some of the countries leading banks, however regulators are yet to comment. The plans are in the very early stages, but a number of Japanese financial institutions are actively drawing up plans to eventually get rid of cash in Japan.
When it comes to cryptocurrency however, one of the most fundamental reasons the technology has taken off so rapidly, is the fact they’re decentralised. When financial institutions begin making plans to create their own version, the element of decentralisation is likely to be ignored!
The plans are hoped to be finalised for the launch of the Japanese 2020 Olympics in Tokyo.
The Estonian governement have already embraced blockchain technology when back in 2014 they launched an e-residency program. This gives anyone in the world the ability to apply online to become an Estonian citizen. This allows anyone who applied the ability to use all of the online services as well as the public services all Estonian citizens are entitled to.
The country also has plans to use blockchain technology as a way to drive forward many of the countries other developments. The former Soviet country has also used the technology to create an online voting system for it’s citizens, and has ongoing public service projects where blockchain will be used.
The proposed cryptocurrency – Est-Coin – however could have the biggest impact on the world. The man in charge of the country’s e-residency program is spearheading the initiative, aiming to make Estonia the first country on the planet to create a state backed cryptocurrency.
It won’t all be plain sailing though as Mario Draghi, head of the European Central Bank criticised the plans saying “no member state can introduce its own currency. The currency of the eurozone is the euro.”
Again though, similar to Japan, the proposed currency will be controlled by the central bank, moving away from the decentralised nature that sets cryptocurrency apart. There are rumours online that the government may even launch an ICO to officially launch the currency, but those claims are unverified.
Kazakhstan are the most recent country planning to move their state currency to a digital blockchain alternative.
The 9th largest country (by area) on the planet has recently softened their stance on cryptocurrency. After a 2014 announcement from Kairat Kelimbetov, then-head of Kazakhstan’s National Bank suggesting that Bitcoin could be “a form of financial pyramid scheme,” the recent increase in popularity has seemed to have changed the countries stance.
They began looking at fair regulation of the current cryptocurrency eco-system back in 2016, one of the first countries to do so. The Kasakhstani Astana International Finance Center (AIFC) are pushing to make Kasakhstan the first country to have a state backed cryptocurrency, and they do have the support of the government.
The same man who criticised Bitcoin back in 2014 when head of the National Bank is now the governor of the AIFC who are working closely with the both the government and other financial institutions to make state backed cryptocurrency a reality.
The issues faced
All three of these countries are pushing for it, but the problem is will a centralised cryptocurrency, such as those proposed really see any kind of success as the fully decentralised, already existing cryptocurrencies we’re all already behind?
Decentralisation has been the backbone behind the wide spread success of cryptocurrency, and placing the control into the hands of the banks could spell disaster.
With governments and banks behind the wheel, the fraud and corruption we’ve seen over the past few decades will only likely worsen. Japan for example has one of the largest public debt deficits on the planet! Could a national cryptocurrency help solve the problems and add more value to a doomed economy, or will centralised cryptocurrencies only make the problem worse?
Join The Bit Forum – Click Here
Follow us on Twitter – Click Here
Discover New ICO’s – Click Here