The blockchain started out with Bitcoin. That’s a fact, so it is only natural that nations are now starting to think about their own digital currency and how that could have an impact on the world. A lot of countries have now started to talk about their own state-backed blockchain and even cryptocurrencies as well, but how they work and even how they will benefit the people is a subject that is open to a lot of debate.
The first country to introduce a currency that is state backed was Venezuela. This is known as being the Petro and it was launched earlier on in the year. This was done in a bid to try and raise money and this is all because there is a crisis happening right now. This is sending the whole world into a meltdown and it is also causing sanctions as well. The president of the country has stated that the digital currency is actually backed by oil. What’s even more interesting is that it managed to raise over $700 million when it was released. This was done to try and save the country’s economy but the problem here is that it happened to devalue the bolivar. They then introduced a new currency and this is going to be backed by the Petro. This is very interesting to say the least and it just goes to show how many movements are happening behind the scenes. The problem is that the Petro does not trade at all and some people have even called it a scam as well. Other people have called it illegal and this comes from parliament. It may seem odd for a country to try and introduce their own cryptocurrency but there are some motivations behind this and when you are able to understand those, you can then begin to understand their reasons behind the whole thing. The president has come to say that their own prices have been dollarized and that they are trying to dominate the prices and salaries using their own currency. They are trying to make the Petro the reference that is able to peg and document the economic movements and this is interesting to say the least.
Venezuela would certainly like to try and see how much the US Dollar is able to dominate and how much the Maduro is going to be depleted. Madura have even come out to say that the country would like to be free from the greenback and that they would like to be free from the dollar and this is something that should be noted. Of course, Venezuela want to have a state backed currency but this may not be suited to copy this. State backed currencies won’t actually do anything to try and stimulate the economic crisis. It doesn’t matter whether you have a fiat currency or whether you have a cryptocurrency because it is so important that you back the fundamentals of the economy that you have. The economy in Venezuela is in absolute shambles at the moment and having a new currency won’t change this at all. A lot of people won’t see it as being valuable and this is because they do not believe in the economy or even in the government. History will unfortunately repeat itself in Venezuela and it will result in the collapse of the Petro.
China and even Russia are some of the nations who have sat together and talked about the digital currencies that are circulating at the moment. This includes countries such as Russia, Iran, Qatar and even Turkey have been in talks. The similarities between all of these companies include the fact that they are all very reliant on the dollar and they are also somewhat related to one another. Cryptocurrency is often seen as a way to try and reduce the amount of reliance that people have on banks and it is also a great way to reduce how reliant people are on the greenback as well. On top of this, it gives you the chance to see where things are going as well and this is interesting to say the least. Digital currencies may be able to help a huge number of currencies and there are people who are looking to de-dollarize. Cryptocurrencies, when you look at the anatomy of them will show you that you can easily have a more independent and even a more trustworthy alternative to the US Dollar. On top of this, you also have the backing of strong assets. It doesn’t matter whether it is gold, oil or so much more because you have to have some degree of stability when you make your way through the process. Hileman has come out to say that it is not entirely clear how a state coin is going to work. Venezuela has come out to claim that the Petro is an asset and it would have to be issued by a central bank. It’s not just the authoritarian nations who are looking to have a state backed cryptocurrencies and some countries are even trying to find ways to make cross-border payments. This is going to be put into a study but it is safe to say that a lot of countries are trying to make everything work for themselves. Whether this becomes a success or not- who knows. Of course, it may be a mistake to call upon a state-run currency and this is because they are not able to run on blockchain at all. They could however run on a digital currency or even a blockchain. This means that if central banks issued it, it would not then be as centralised but this may not always be the case. This would be a big difference when you look at Bitcoin but it could also be based on the blockchain and the fact that it is decentralised as well. On the other hand, when you look at the state backed currencies you will also find that they have been issued by a central authority as well and this could even be a central bank. Blockchain technology offers the promise of having a far more efficient process and everything is far more accurate as well. This could be all down to how it works. When you look at governments, you will see that this is very exciting and it also shows the amount of data that it can be held on to for citizens as well. So it is important that you are able to look at the bigger picture and when you look at this you will soon see that nations are more than responsible for a massive record-keeping victory. This could really move onto the blockchain and it could mean huge things for the future. So with that in mind, it’s time to look at the bigger picture.