National digital currencies

Financial authorities in a range of countries have already appreciated the benefits of digital currency. This is the speed and security of transactions, the ability to make micropayments and simple accounting of all transactions with money. Digital currency can be used to reduce government debt, avoid sanctions, reduce losses from currency conversion in international trade. Payments in digital currency will help reduce corruption, as transactions are completely transparent. At the same time, the costs of operations with banknotes and coins are increasing. These are the conditions for the birth of a new e-currency, which will be issued and put into circulation under state control. The national crypto does not necessarily have to be based on a blockchain. There are other technical solutions for monetary settlements such as DAG (directed acyclic graph).

China’s leadership

Will Europe be next?

© Bruno Neurath-Wilson / Unsplash

What about other countries?

The national digital currency has been successfully implemented in Tunisia. Issued by the Central Bank of the country “E-Dinar” is used to pay bills and taxes, payments for goods and services.

The Marshall Islands also became an example of successful implementation of the national digital currency. An interesting approach of the central bank of this small country is that the digital asset with the name SOV has become an addition to the US dollar.

The countries of Western Africa are actively implementing eCFA. This digital currency will be used by residents of Benin, Mali, Burkina Faso, Niger, Togo, Guinea-Bissau, and the Ivory Coast.

In Singapore, UK, Japan, and Switzerland, the feasibility of issuing national crypto is still under study.

National crypto is not always implemented successfully

Venezuelan Petro was announced in 2017 and appeared in circulation in 2018. Since then, its implementation has not been successful — in the test mode it is used by some stores and the local state airline.

In Ecuador, the experiment to implement digital currency was found to be unsuccessful and rolled back in 2017.

Testing of e-Peso in Uruguay was limited to an audience of 10,000 mobile users and several dozen businesses.

In Dubai, since 2017 they have been testing the emCash payment system, which was to become the state digital currency of the emirate.

For a long time, nothing has been heard about the Ukrainian developments of digital hryvnia, announced in 2018.

Tested in Russia, the system of fast payments (SBP) based on the “cryptoruble” has not received further development since 2019.

Despite current difficulties with development and implementation, the state cryptocurrencies and digital currencies issued by central banks (CBDC) will become extremely important in this decade. Digital currencies and blockchains have become a factor of big politics. A country that was the first one to fully implement digital currency in its payments will have an important technological advantage. For this reason, the comparative study of cryptographic algorithms has become interesting not only for geeks, but also for heads of state, heads of central banks, and intelligence agencies.

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# National digital currencies# National crypto

Originally published at https://simpleswap.io on December 10, 2020.

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