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State Cryptocurrencies – 2.0

06/07/2019
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  • Cryptoregulation
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According to researchers from Avenir Suisse, the largest analytical center in Switzerland, the blockchain technology has already created a new economy. The one who succeed in evaluating its potential first will receive significant preferences. For this reason, they urge the government to begin active work on national stablecoin launching and transfer the financial industry to digital space.

Why do People Need a Frank Token?

During the 20th century, Switzerland was considered as a financial haven, however, she has lost this title now. The dominance of pan-European and American finance systems leads to the loss of previous preferences by Switzerland. Avenir Suisse believe that they have found a way to revive the national capital market and make it investment attractive. For that to happen, franc token is needed to be released and fully controlled by the Central Bank of the country.

It is expected that due to the introduction of franc token, the companies will receive more favorable terms. This will reduce transaction fees and remove legal obstacles in international trade.

The report provides that investors are already considering the country as a kind of crypto valley. It has the mildest conditions for regulating cryptocurrency in Europe; Libra Networks is registered namely in Geneva, which is developing GlobalCoin for Facebook.

Do Cryptocurrencies Have Future at the Domestic Level?

A number of nations announced their plans to create state cryptocurrency. However, it is too early to talk about serious progress in this direction. Sweden was one of the first to announce such plans, but e-krona is still a project. At the current time, the authorities are not ready to take such a decisive step and transfer financial calculations to blockchain.

The experiment conducted by the Central Bank of Ukraine to launch e-grivna raised more questions than answers. The Cashless Economy project together with the World Bank started in June 2017 and was completed in 2019.

Two aspects generate most of the questions. The authorities are interested in degree of user anonymity which will be necessary to attract a sufficient number of buyers. Moreover, not least important is the question about the technology of new token launching itself. Now, the developers offer a number of solutions, but each of them has its defects. The problem of security and network stability is first in line among them.

Risks for the State and Economy

The introduction of blockchain technology into the state financial system has not yet been worked out. There is much talk of it in almost every country, but no one dares to take the first step. If putting Venezuela’s experience aside, where economy’s actual collapse is observed, there is not a single example of real national stablecoin launch.

In 2018, Venezuela had inflation of 1,700,000%. Attempting to cope with the problem via the introduction of national cryptocurrency led to the expected failure. However, here it’s worth talking not about the blockchain drawbacks, but about the country's financial system itself.

The one who will be able to launch the first state cryptocurrency will receive great advantages in international trade. Yet, it is necessary to change legislative and regulatory standards at the initial stage. However, it is far-from-simple to make such a decision.

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