Governments Might Start Issuing Their Cryptocurrencies
With crypto-mania sweeping the planet, a couple of nations have stirred at the likelihood of issuing their virtual currencies supported blockchain, the technology behind Bitcoin. For now, the thought seems hottest among autocrats looking to evade or undercut international sanctions that are enforced, in part, through the worldwide banking industry. But advocates of government-backed cryptocurrencies say that if the movement takes hold - which is by no means assured - it could irrevocably change the international medium of exchange as we all know it. Cryptocurrency mining is the influence of traditional global central banks just like the Federal Reserve System and therefore the European financial institution.
Which other countries are considering cryptocurrencies?
Russia's financial institution plans to speak to countries including Brazil, China, India, and therefore the five former Soviet republics about creating a supra-cryptocurrency that would cover countries with 40 percent of the world's population. People's Bank of China Deputy Governor Fan Yifei wrote a piece of writing broaching the likelihood of a digital currency it might issue with Chinese commercial institutions.
Aren't cryptocurrencies by definition non-governmental?
Until now, yes. Bitcoin and its many competitors and imitators have developed independently from a central authority - and intentionally so. In theory, a government could have greater control of a virtual currency than a paper one because it might be ready to keep tabs on all transactions recorded on the blockchain ledger.
How would governments enjoy issuing cryptocurrency?
Regulating the cash supply through changes in interest rates - i.e. monetary policy - would be far more direct, which could mean it's simpler and cost-efficient. Governments could clamp down on evasion since transactions are going to be traceable. Plus, for an equivalent reason, Bitcoin is so popular among people looking to bypass government control of currency, starting a digital currency might sound attractive to any government that does not like how it's being treated by the worldwide economic system that has governments facing international sanctions.
CBW - External Analyst