See How Countries Can Develop Sovereign Crypto Economies Efficiently And Cost-Effectively

There are several countries these days that still don’t have a currency of their own as well as Ecuador and Marshall Islands. Several of them are little countries that can’t afford expensive  printed fiat currency management.

The emergence of sovereign cryptocurrencies has presented a new method for countries to be currency independent and form a new identity as a key player in the sophisticated digital economy. For this reason, the mission to implement digitized currency on the blockchain – also mentioned as ‘sovereign cryptocurrencies’ – has become the goal for several of these countries’ central banks and governments.

In fact, countries like China, England, Russia, Japan, Sweden, Australia, Netherlands, Singapore, India and others have all been seen to be testing their blockchain-based cryptocurrencies.

Ecuador looks to have been ahead of the pack in this department when it became the primary country to roll out its own government back digital currency. Ecuador’s Sistema de dinero Electrónico (electronic money system), hosted the first-ever state-run electronic payment system in the world.

For different countries, cities or nations striving to do the same, it takes over just the flipping the switch off from fiat to crypto cryptocurrency. In Ecuador’s case, their journey began in 2000 when the country of sixteen million people ditched their stumbling currency for the U.S. dollar so they had no choice but to seem for an alternative solution to their currency problem.

Countries need to be serious in developing a new crypto economy around their own cryptocurrency for long-run sustainability. Simply making currency and selling that as a digital asset/commodity to global voters through ICO or exchanges won’t produce their own crypto economy. The method for cryptocurrencies to be on its way to be a global reality are often accelerated with careful thought of five key parts that glue us together to make an economy:

1. Members of the society

Key members such as government, citizens, visitors, banks, entrepreneurs, software system developers, schools, and hospitals all make up a well-functioning society. the needs|the wants} and requirements of these players should take the lead in navigating the rollout of a sovereign cryptocurrency because they create up identity management and systems.

It’s important for governments or companies issuing sovereign digital currencies to consider what their citizens need in their daily lives. This involves basic tasks like buying groceries, paying rent and paying different utility bills. Let’s face it, if citizens are unable to hold out basic tasks like paying for their lunch in sovereign cryptocurrencies, then that will defeat the aim of issuing it.

2. The function of a currency

Governments and central banks nowadays pay a lot of money on paper currency printing,  regulation, usage and typically even the burning of that cash. Sovereign cryptocurrencies can eradicate all the administrative costs and processes that go along with paper money, but that does it's not as simple to implement as it sounds.

Organisations who need to issue sovereign cryptocurrencies need to decide how they need to structure it. This implies considering what the processes are, however they generated, circulated and stored.

Let’s take Chandler city placed southeast of Phoenix Arizona an example. If the town council would like to issue a Chandler coin, as long as they're issued on an Ethereum network, they may list on an exchange. However to flow into such a currency could be a complicated task. Blockchain technology software system development will be the most effective solution to assist governments with cryptocurrency generation, circulation, storage, usage and burning.

3. Identity management

 Identification is the most vital issue for people or businesses. Traditional identity method can be integrated with blockchain primarily based identity management to make it more secured. A simple to use Identity API, which might be customized for this purpose can facilitate with this method.

This perform can be helpful for a government welfare profit distribution method. During this case it’s necessary for the government welfare system to know specifically who needs to receive a contribution and how much. This will even be used for business-to-business transactions so that companies recognize specifically who they're working with.

4. Document storage

 Governments have the responsibility to manage necessary records (ie. birth, death, marriage, divorce certificates), registrations (ie. Land and, home, car, boat etc.) and financial documents for citizens.

Using blockchain technology, existing and new documents are often managed simply and firmly. Systems can be put in place to generate, distribute, store, authorize and even shred documents.

Distributed web technology will change these systems, however, this has to be developed for the needs of storing and tracing documents.

Again to implement a system like this can be expensive and time-consuming. All governments need is a blockchain technology software development kit that they can merely implement.

5. Systems, device, applications and smart contracts

 Scanners, Bar/QR code readers, mobile or web applications, existing IT systems are used to process day-after-day transactions of members. These devices and systems should be enhanced to handle blockchain based mostly transactions via Apis and smart Contracts.

Even with the fundamental daily activity of going to a grocery, an individual is exposed to all these systems. Let’s take shopping for milk for example, when someone goes to pay for the grocery item they have to scan the barcode on the milk carton and then take out their credit or card to pay via the card machine, which has sensors to take their payment. During this case, the payment process part can be enhanced with the utilization of cryptocurrencies. It can be quicker and a lot of efficient both for the businessperson and the customer to transfer payments.

Taking these 5 elements into consideration in the rollout of a sovereign cryptocurrency, governments need confirm they’re making a crypto economy that's as open source as it can be. They must use existing and popular blockchains as a result of they're proven to be additional scalable. Basically they'd need to engage a developer community who can develop apps for the govt at no cost.

It’s not suggested for governments to create their own blockchain because it defeats the aim of having a cryptocurrency, which becomes expensive  to manage in the long run. The best way to begin is to make a sovereign currency and creating it as stable coin that has low volatility. Users can eventually convert their existing fiat to crypto. From there, the govt can encourage basic financial transactions such as sending, receiving, storing, buying, selling and paying bills with cryptocurrency. Once all the systems and applications are in place for citizens to perform these transactions then the sole factor that’s left is to educate users on how sovereign cryptocurrencies work. Education is the most challenging half, but this should become easier over time.