The hype around Bitcoin and the cryptocurrency boom of 2017 couldn’t have passed unnoticed by authorities. But due to the manipulative nature of the whole crypto market, in many cases, it just led to the total ban.
However, in some regions, the government proved to be more open to new technologies and launched the state-issued digital currencies of their own to provide the citizens with the fast and convenient means of payment. Such digital currencies differ from Bitcoin since they cannot be created on the end-user machines and remain under the centralized control. In fact, they are just the same currency that we use on a daily basis, but only in the digitized form.
In this article, we are going to review the countries that have already issued their own CBDC (Central Bank Digital Currency) or are very close to considering this option.
Despite the total ban on cryptocurrencies and ICOs, China still looks at the new blockchain technologies and plans to implement them on the official level. In October 2018, the director of the People’s Bank of China’s (PBOC), Yao Qian, declared the successful completion of creating the prototype of the national cryptocurrency and testing algorithms that would be used for its supply. The test transactions were conducted between commercial banks and the central bank.
The digital Yuan will have the same legal status as fiat currencies and will be solely issued by the central bank. The date of its release is still unclear.
Ireland’s national cryptocurrency is Irishcoin, which is the national cryptocurrency backed by the tourism industry. Thus, the initial purpose of Irishcoin is to promote tourism in Ireland.
Initially, the founders of the project had huge plans to cooperate with companies that are associated with tourism and hospitality, as well as with a plethora of pubs and entertainment sector in general. Irishcoin would then act as a discount voucher and a payment remittance.
The industry is huge and has good potential, so accordingly, the coin’s price soared (even though together with other cryptos) in January 2018, but the tokens were unlocked only three months later. The current situation of Irishcoin is not particularly good. As of November 29th, 2018, the coin is listed only on Cryptopia with the market cap below USD 40’000 and the daily trading volume of 11 U.S. dollars.
The Marshall Islands located in the midst of the Pacific ocean somewhat 3’500 km to the North-East from Australia have been using the US dollar as the official currency as the republic is in free association with the United States. However, in March 2018, President Hilda Heine came out with the suggestion to issue a local state-backed cryptocurrency called “sovereign” (SOV).
The plans of the coin issuance have been frozen for a few months, but now the things seem to be moving ahead now. The currency is being created in collaboration with an Israeli fintech startup Neema. Half of the coins will be sold to foreign investors, the rest will be either distributed among the islands’ citizens (53’000 people) or kept in the state fund. The SOV supply will be reportedly limited to 24 mln coins so as to avoid inflation.
On the tide of cryptocurrency rally in December 2017, the Venezuelan president Nicolas Maduro announced the plans to issue an oil-backed cryptocurrency ‘el Petro’ in order to avoid the US sanctions and to improve the local economy. The pre-sale of the state-backed digital coin began in February 2018 and lasted for approximately a month. 38.4 mln tokens were distributed during this phase and USD 3.3 billion were raised according to the official statements.
Initially, the white paper of the petro claimed that currency would be based on the Ethereum platform, but later the course was changed for the favor of NEM. Due to the bad organization of the token sale process, many fraudulent schemes were invented trying to sell false petros on different platforms. However, the scammers didn’t get too much luck with this enterprise.
As of November 2018, the currency has still not been officially released, though the Venezuelan authorities still negotiate with OPEC and other countries regarding petro’s usage.
This East-African country can be truly considered to be the pioneer of CBDC (Central Bank Digital Currency) as it issued its local blockchain-based currency eCFA named after Senegalese fiat currency CFA franc in December 2016.
eCFA was created with the help of the local bank Banque Régionale de Marchés (BRM) and an Irish startup eCurrency Mint Limited that develops and provides technology helping central banks to issue digital fiat currency. Just like with all other national cryptocurrencies, eCFA is fully controlled and issued by the central bank and other authorized financial institutions.
The Tunisian government has issued its own blockchain-based cryptocurrency called eDinar, also known as Digicash and BitDinar, even before Senegal in 2015. The Switzerland-based software company Monetas assisted in integrating the blockchain technologies at the official level.
Just like with regular cash, eDinars are issued and distributed only by the government-backed company La Poste. There are small transaction fees that come with eDinar payments, but they are really small and limited by 1 eDinar.
Dubai is one more early adopter of blockchain technologies at the official level. The launch of a national cryptocurrency called Emcash was announced in December 2017. The cryptocurrency will be based on the native blockchain explicitly developed for this purpose and issued by the first official credit bureau ‘Emcredit’ in collaboration with Pundi X, Loyalty Labs LLC & Ebooc Fintech.
Dubai residents will soon be able to use Emcash for daily shopping, paying bills and even such simple needs as the school fees. The coin will be accepted not only by PoS devices but also will be available for spending via a mobile app.
The whole system waits for the official approvement till the end of this year, and by 2020, Dubai aims to become the first blockchain-powered government in the world.
Riksbank, the Swedish central bank, has been pondering the opportunity to launch the national cryptocurrency e-Krona since spring 2018 aiming to facilitate the payment processes for its cashless society.
Currently, most of the Swedish retailers do not accept cash, and only a minor part of society uses cash for daily purchases. Implementing the state-backed blockchain currency would help them a lot, but there is still the question of elderly and disabled people, as with the new money they will be simply left out.
The local authorities are still looking through different options, and the bank still fears to lose the ground in favor of Paypal and cryptos. However, the project has not been put aside, and the latest news shows that the process moves on.
Summing up on national cryptocurrencies
The conveniences that the digital currencies provide in comparison with traditional cash are indisputable. The fact that some countries consider issuing their own digital currencies can do nothing but please those who are keen on all the new technologies.
The pace at which these technologies evolve makes us hopeful that we may yet live to see the cashless society in the nearest couple of decades. So let’s wait and see where it all leads us to.