By announcing the launch of its own digital currency to the world, China has pioneered this trend globally. In fact, the US and Europe are also in the planning stages of launching virtual dollars and euros respectively.
There is therefore no doubt that monetary authorities around the world are rushing to design digital currencies, although a question remains, and it is the question that many analysts are asking: who is capable of doing so?
Applying the same logic as NASA when hacked, the tendency is to hire the hackers to solve the problem. Some of the first governments to go digital have in fact found an answer in cryptocurrency enthusiasts.
For these “rebels”, united against traditional approaches to finance, the digital trend can represent an extraordinary opportunity to create virtual money for an entire nation.
One example is certainly that of Israeli cryptographic consultant Barak Ben-Ezer, who left for the Marshall Islands in 2018 to propose to the Pacific Ocean archipelago the adoption of a national currency, which he designed in resemblance to bitcoin.
The government soon gave Ben-Ezer responsibilities more typically reserved for treasurers and legislators, and within months, the entire Marshall Islands parliament overwhelmingly passed a law adopting his creation – called SOV – as legal tender, a crucial step towards its actual issuance.
Demand for strategies on how to build a digital currency has been supercharged by signals from China, which may be close to launching a digital version of the yuan: not surprisingly, Beijing said on Friday that its e-CNY has already been tested in more than 70 million transactions worth more than $5 billion.
Even major central banks often have teams modelling digitalization scenarios, although many are more quietly turning to engineers with experience in cryptocurrencies and blockchain.
Even the US Federal Reserve has worked with several experts, at the Massachusetts Institute of Technology, to create a possible digital dollar that could see widespread use in a few years.
Author
Giuseppe Pascarella is a financial analyst and founder and CEO of PascaProfit Group, one of the leading Italian and European companies in the field of analysis.
Often a guest at important meetings with prominent figures such as Christine Lagarde (number 1 of the ECB) and Ursula Burns (former Obama advisor), he is also active in promoting financial literacy in Italy thanks to his books “Battere il Benchmark” (“Beating the Benchmark”) and “Dove metto i miei soldi” (“Where to put my money”).
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