Recently I was interviewed by a well-known economics journalist…. and I was surprised.
The background: I am the CEO of a company that is going to implement blockchain technologies in small countries. The process will start by upgrading the local fiat currency to a blockchain based cryptocurrency, accompanied by tools like transfer, exchange, taxes, KYC, AML, reporting…
A currency as a cryptocurrency has many advantages and will — from my point of view — change economics fundamentally.
· Simple example: such a currency allows a government to help bypass restrictions like the lack of correspondent banks.
· More complex example: such a currency allows a government to directly work together with the population. For example, it is possible for the government to submit debit cards to farmers, so they can rebuild their farms after a disaster; without any banks involved (and within days).
These are just examples. Many other possibilities exist.
Government issued wallets on a government blockchain will be here rather sooner than later. Smart contracts will enable a much closer relationship between government and their population. In my above-mentioned example, a government does not even need to issue debit cards. They can select vendors that carry specific products/services and then tell the farmers what products/services they have been allocated to and where they can get them. The process can be fully automated and is transparent. The money transfer is done in the background.
Or what about credit loans for housing projects, or business startup loans to boost sectors of the economy. Operations that are traditionally embedded in banks / credit unions, but in future can be realized directly by governments?
The local currency as a new reserve currency asset that is equity based and a 100% reserve (like in your hands) will bring more stability to the fiat currency and to fractional reserve banking. If implemented correctly.
Here is the problem: traditional economists like the one that interviewed me, don’t take crypto serious “Sir, I covered the IMF and World Bank. I am an economist. Your idea will not work”. I rate him as a highly professional journalist and I was honored he contacted me. But these old-school economists must realize the earth is not any longer flat.