When one sees that the applications of a technology are multifold, with time it would impact the legacy systems. When it comes to cryptocurrencies, the legacy system is the existing financial setup. That being said, the important question here is how are cryptocurrencies impacting it? Well, the existing financial system has many loopholes which might be dangerous if not properly monitored. Anyone who witnessed or experienced the brunt of the 2008 housing collapse would understand this really well. Too much control over the purchasing power of money and its manipulation can be hazardous. Even the Governments and the Central Banks have come to realize this off late. This has led to the experimentation of State owned cryptocurrencies that are decentralized and open. Let’s look into how countries are experimenting with them in their nascent stages:
Russia hates Bitcoin but wants to have its own cryptocurrency:
After China, Russia became the second country to ban Bitcoin. But as hypocritical it might sound, Russia is considering the possibility of introducing a national regulated cryptocurrency. The Russian Federal Financial Monitoring Service (Rosfinmonitoring) revealed this according to the Kommersant newspaper. The idea of introducing a cryptocurrency is being discussed with representatives of banks and at meetings in the Finance Ministry. Though it would be a cryptocurrency, Russians are planning to make it a bit centralized as against bitcoin. A Russian regulated cryptocurrency should not be a non-emission currency but it will have its issuer with rights and responsibilities. This issuer can be “financial organizations that will be entrusted with the emission of cryptocurrencies.” This activity is most likely to be subject to licensing, Rosfinmonitoring said.
South Korea’s progressive take:
South Korea can be credited as the most progressive nation when it comes to cryptocurrencies for the variety of applications they provide. From a wide range of vendors accepting Bitcoin to the launch of the first Bitcoin based ETF in the world, Korea has always been ahead.
Recently,the chairman of South Korea’s Financial Services Commission (FSC), Yim Jong-yong came out with an interesting announcement. He said that his department will “Lay the systemic groundwork for the spread of digital currency.” The FSC is the South Korean government office overseeing financial services. In 2008, the department assumed authority over all financial policies regarding the financial market. No details were given about the form or technology that the FSC’s digital currency will use. Basing on the local experimentation, it is believed that they would be using a new cryptocurrency based on Blockchain Technology.
World’s oldest Central Bank is in the race too:
Sweden’s central bank is reportedly considering the issuance of its own digital currency, ekrona. This is primarily to address the significant decline of the use of cash in the country. First revealed in a Financial Times report, Sweden’s Riksbank could introduce and issue its own digital currency before the turn of the decade. Sweden has seen a rapid decline of the use of physical cash – both coins and notes – in recent times. It is estimated that the Circulation has dropped by 40% since 2009, leaving Riksbank little choice. A large number of Swedes have abandoned cash for cards and other forms of digital payments turning it into a cash-free society.