July 4, 2020, 14:22

Physical Currencies Naturally Evolve Into National Crypto – Strategist

Physical Currencies Naturally Evolve Into National Crypto – Strategist

Speaking at a conference in Singapore, International Monetary Fund head Christine Lagarde noted that central banks should ponder issuing digital currencies, as the move could render digital currency transactions safer.

In comments to Sputnik, Jeremy Allaire, an American technologist and Internet entrepreneur, CEO and founder of the digital currency company Circle and chairman of the board at Brightcove, has expressed a strong belief that all fiat currencies, as we know them today, will become digital ones.

Those “open standards for money on the Internet” will facilitate the development of value exchange, for it to operate in the same way as information exchange does, making it “open, global, instant and nearly free.” He went on to elaborate on a related project that their team has engaged in together with Coinbase, a major global cryptocurrency platform, and their brainchild – the so-called CENTRE Consortium:

“While we welcome Central Bank research in this area, we have worked with other industry leaders such as Coinbase to form a new standards and governance scheme — CENTRE Consortium — for the issuing and use of fiat digital currencies such as USD Coin (USDC),” Allaire explained.

Similarly, Gabor Gurbacs, an American discrete mathematician, digital asset strategist/director at VanEck/MVIS, views national cryptocurrencies as a result of a natural economic evolution affecting physical currencies issued and supported by central banks.

“We are slowly transitioning towards more electronic and cash-free societies, so the IMF decision makes sense to me and I expect more countries to follow suit,” Gurbacs stated in an interview with Sputnik. Furthermore, he stressed the undisputable favourable impact that digital coins may carry for a national economy given a “large-enough-scale adoption”:

“National cryptocurrencies may enable central banks and governments to increase transparency into their economic activity, trade and import-export relations.”

Separately, he asserted that digital currencies “are likely to reduce cash usage,” further reiterating greater “transactional transparency.”

Responding to Sputnik’s question on a connection between the IMF’s backing of digital coins and some nations’ (Iran’s and Venezuela’s) moves  to devise coins to bypass US-imposed restrictions, Gurbacs stated that most cryptocurrencies “are not designed to bypass US or other nations’ sanctions,” adding that it is reasonable to assume that this will also be the case with national cryptocurrencies.

“I expect the IMF to recommend certain third-party-enforced transparency, auditability and pricing requirements for national cryptocurrencies,” the digital strategist noted, going on to say that in the absence of those safeguards, national cryptocurrencies won’t enjoy truly broad adoption, “as a store of value or mean [sic] of value transfer.”

 He even welcomed prospective joint work with the IMF, central banks and other authorities:

“I welcome outreach from the IMF, central banks and finance ministries should they find our work and expertise in digital assets, pricing/indexing or financial structuring useful in national cryptocurrency development,” Gurbacs concluded.

Last week, IMF head Lagarde stressed that there “may be a role for the state to supply money to the digital economy,” adding that this would provide opportunities for making “immediate, safe, cheap and potentially semi-anonymous” payments, which cryptocurrencies were initially meant for. “And central banks would retain a sure footing in payments,” Lagarde underscored.

READ MORE: Venezuelan Cryptocurrency Petro to Be Adopted for Int’l Trade on Oct. 1 — Maduro

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