Cryptocurrency Ready to Face the US Dollar
Cryptocurrency is likely to replace the US dollar in the near future, except not in the United States. The Marshall Islands has already taken steps toward creating and implementing their own legal tender in the form of cryptocurrency. The Parliament voted to approve the cryptocurrency known as Sovereign. As outrageous as it sounds to make cryptocurrency legalized tender, the Marshall Islands is not alone.
Recently, Venezuela created its own cryptocurrency known as the Petro, which is the first example of a country creating official tender in the form of cryptocurrency. The goal is to improve the economic state of the country, which is in a state of despair, but through potentially illegal methods. The move to create cryptocurrency is a way to impede U.S. Financial Sanctions according to Stratfor. Something that Russia and Iran have discussed doing as well. However, the Marshall Islands currently use the US dollar and are not looking for a way to dodge sanctions.
A recent article on CryptoCoinNews discusses why the Marshall Islands might want to move away from the US dollar. It speaks on the health issues that are still arising from the numerous bomb tests carried out from 1946 to 1958. The amount of aid to the country has been minimal despite the Independent Nuclear Claims Tribunal "awarding" $2.3 billion. I say "awarded" because the United States has still yet to pay the Marshall Islands this money and do not have any motivation to either. Creating an official currency in the form of cryptocurrency is their plan to raise money for Health Care for their citizens.
When a cryptocurrency is initially started there is an ICO—or initial coin offering—where investors
will be able to purchase the coin at a cheaper price for a limited amount of time. This is a way to raise
money initially. The Marshall Islands plan to put part of this money toward Health Care.
While most would agree that the possible use of cryptocurrency in Russia and the actual use of cryptocurrency in Venezuela seem harmful to the global economy, it is more ambiguous when it comes to the Marshall Islands. Despite their good intentions, the move to cryptocurrency could have global economic consequences. According to the Medium, "The US Dollar is the reserve currency of the global economy." This basically is saying that the global economy is very interconnected and it is all centralized around US Dollar.
Cryptocurrency disrupts financial institutions due to the decentralized nature of blockchain technology. There is a organization to regulate international money transfers currently known as the Society for Worldwide Interbank Financial Telecommunication. This would crumble at the mercy of cryptocurrency. The whole point of cryptocurrency and blockchain technology is that the transactions are not controlled by one party or organization, but instead validated by each node.
It is still unclear whether cryptocurrency will revolutionize money or whether it will die out just as quickly as it appeared, but it should be watched carefully because it could have drastic consequences for the global economy.
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| Source: World Maritime News |
A recent article on CryptoCoinNews discusses why the Marshall Islands might want to move away from the US dollar. It speaks on the health issues that are still arising from the numerous bomb tests carried out from 1946 to 1958. The amount of aid to the country has been minimal despite the Independent Nuclear Claims Tribunal "awarding" $2.3 billion. I say "awarded" because the United States has still yet to pay the Marshall Islands this money and do not have any motivation to either. Creating an official currency in the form of cryptocurrency is their plan to raise money for Health Care for their citizens.
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| Source: NPR |
will be able to purchase the coin at a cheaper price for a limited amount of time. This is a way to raise
money initially. The Marshall Islands plan to put part of this money toward Health Care.
While most would agree that the possible use of cryptocurrency in Russia and the actual use of cryptocurrency in Venezuela seem harmful to the global economy, it is more ambiguous when it comes to the Marshall Islands. Despite their good intentions, the move to cryptocurrency could have global economic consequences. According to the Medium, "The US Dollar is the reserve currency of the global economy." This basically is saying that the global economy is very interconnected and it is all centralized around US Dollar.
Cryptocurrency disrupts financial institutions due to the decentralized nature of blockchain technology. There is a organization to regulate international money transfers currently known as the Society for Worldwide Interbank Financial Telecommunication. This would crumble at the mercy of cryptocurrency. The whole point of cryptocurrency and blockchain technology is that the transactions are not controlled by one party or organization, but instead validated by each node.
It is still unclear whether cryptocurrency will revolutionize money or whether it will die out just as quickly as it appeared, but it should be watched carefully because it could have drastic consequences for the global economy.
I don't know if cryptocurrency will ever replace legal tender, just on account of its volatility. However, I don't think it's going away; even if Bitcoin or Ethereum dies out, the underlying blockchain technology shows great promise.
ReplyDeleteThe idea of a national cryptocurrency is a very interesting one. I personally think that it is better to wait to do so until cryptocurrency markets stabilize more, but seeing countries (even if it is only a few) adopting such currencies is a good sign that of a long future for cryptocurrencies.
ReplyDeleteI believe cryptocurrency is very beneficial to any country that plans to incorporate it into it's platform. It allows people to transfer money peer-to-peer without the fee of middle mans like banks. Being an investor into many different coins and tokens, I am all for countries to get involved in crypto before it explodes in popularity.
ReplyDeleteI know very little about cryptocurrency, but my uncle has been trying for years to convince me that I should start a bitcoin account because there is a large future in this. The fact that this currency is working towards replacing a national currency does show that it very easily could be our future. It makes me wonder if my resistance to it is ignorant or the best decision.
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