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Beneficiary countries and others fear .. Do digital currencies break the strength of the dollar?


While some governments see Bitcoin and other cryptocurrencies as a threat, others are looking for the best ways to take advantage of their benefits.

More than a decade has passed since Bitcoin's first swap, in January 2009, and the most famous cryptocurrency reached the $ 20,000 barrier two years ago, before retreating.

The governments of some countries see cryptocurrencies as a way to save their troubled economies, says writer Ksenia Semenova in a report posted on the US website Stratfor.

United State
The writer said that many people face several difficulties in the level of understanding of developments in the cryptocurrency sector, and perhaps the most prominent signs of misunderstanding is to warn US Rep. Strongly the US dollar.

The writer added that the US deputy explained that enabling countries such as Iran to use these currencies will make them exceed US sanctions, disrupt Washington's foreign policy, and undermine the importance of global sovereign currencies.

The writer pointed out that the opinion of US Representative Brad Sherman reflects the opinion of the US administration in general.

The cryptocurrency community responded quickly, saying that the world was moving towards a space where sovereign status declined in favor of virtual currencies.

Governments can pass central laws that prevent circulation of these currencies, but the enforcement of these laws will be impossible, the blogger said.

Facebook to launch Libra in 2020 (Getty Images)

Facebook Currency
Media writer Ksenia Semenova says that the media cannot ignore Facebook's announcement of the launch of its own currency, Libra, in 2020. The currency is expected to be of stable value and is a digital asset backed by many other sovereign currencies such as the dollar, euro and yen. Offices in Switzerland, with multiple partners such as Visa, MasterCard, Vodafone, PayPal, eBay, Uber and Queen Pays.

The writer spoke of the divergence of views on the issuance of Facebook this currency; communities cryptocurrencies still look to "Libra" with optimism, despite breaches of the parent company on the privacy of users on more than one occasion.

But Chris Hughes, one of Facebook's founders, is worried about Libra's impact on emerging markets, which will be relatively unable to control domestic currency exchange and capital controls, Ksenia Semenova said.

In addition, lawmakers and central bank governors are concerned about this, and the chairman of the House Financial Services Committee, Maxine Waters, has previously asked Facebook to stop developing its new cryptocurrency so that it can clarify questions about potential privacy violations related to consumer data.

Central bankers in the UK, France, Germany and Australia agreed with their US counterparts that currency developers should answer many regulatory questions to make sure they would not endanger financial systems or be used for money laundering, the writer said.

The author pointed out that Facebook plans to launch its currency has benefited Bitcoin currency.

Beneficiary countries
The author says that while the US dollar's position in the global economy remains as strong as before, the United States continues to impose many sanctions on Russia, Venezuela and Iran, and is working to deepen the conflict in the war with China, which drives these countries and others to try to find an alternative to the currency American.

Geopolitical instability, she says, would fuel the growing desire for a decentralized currency infrastructure no matter what Washington wants.

According to the author, Russian authorities have provided multiple references to cryptocurrencies; while she says she will issue a gold-backed currency, the head of Russia's State Duma cryptography group, Elena Sidorenko, said Russia is not ready to integrate its traditional financial system with cryptocurrencies.

The author cited Russian President Vladimir Putin's position on his country owning a digital currency of his own, saying "Russia or any other country can not own its own digital currency, and the reason is that digital currencies transcend national borders."

Some people in Zimbabwe have found a suitable solution to keep their money in the face of inflation (Anatolia)

Despite Zimbabwe's poor technological development, many Zimbabweans are familiar with technology and most use Bitcoin, the report says.

Inflation is one of the factors behind the adoption of cryptocurrencies as the most appropriate solution to control the value of their money.

With inflation rising to 50 percent, markets deteriorating, and the peso depreciating, the government - as well as tech-savvy citizens - has shown increased interest in Bitcoin and other cryptocurrencies.

In March, Deputy Finance Minister Felix Martin Soto said the Argentine government should use cryptocurrency and blockchain technology to reduce demand for the US dollar and encourage global investment, the report says.

Semenova: Some countries see cryptocurrencies as a way to save their economies (Reuters)

Venezuela was the first country to offer its own currency, the Pietro. After the collapse of the Venezuelan economy, the value of Venezuela's national currency, the Bolivar, fell to its lowest level ever, but this economic collapse encouraged the country to adopt a digital currency.

Petro's currency was supposed to help Venezuela overcome US sanctions and resolve the economic crisis, but it did not seem to work as expected, the author says.

Marshall Islands
In 2018, the Republic of the Marshall Islands announced its plan to create its own digital currency called "Sovereign".

In June, the government said it had set up a nonprofit to develop the digital currency, which will be traded alongside the US dollar, the currency currently used in the Marshall Islands.

The success of this currency in the Marshall Islands proves that cryptocurrencies could replace the US dollar, according to the author.

The future of cryptocurrencies
The writer explained that governments' fears of adopting cryptocurrencies can be understood. They are a new form of money, unlimited and unmanageable by the central bank.

In fact, countries could benefit from these cryptocurrencies, especially small countries such as the Marshall Islands, Malta or Estonia, the author says.

The creation of its own cryptocurrency or the adoption of Bitcoin as the main currency could be a means of attracting companies and businessmen, which in turn would promote economic and technological development, according to the author.

Source: aljazeera

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