A solution to the problem could be any stable coins that have a constant value in fiat currencies or some other assets. One of the attempts to create such a coin was Tether, tied to the US dollar, but recently it was compromised. Another attempt is DAI, an asset based on a basket of crypto-currencies. It has been developing for three years, but is still not ready for widespread use because of its complex structure.
Since regulators around the world are struggling to keep pace with technology and implement blockade, state-issued koins could be an important means of containing the mentioned volatility in the crypto-currency market.
Fighting volatility
The stable token issued by the state is a crypto-currency asset whose value is tied to the national currency of the country in the ratio 1: 1. Such an asset could withstand the unrestrained volatility of the crypto currency that is observed today.
Bitcoin, whose price has recently grown rapidly, is still subject to significant fluctuations, and this unpredictability makes it unreliable.
Tokenization of the national currency with the help of a block of credit will fill this gap and restore confidence in the market, but it will give bitcoin and other crypto-currencies time to ripen and become more stable. A stable coin will also accelerate the process of implementing blocking because it allows traders, retailers and buyers to make transactions using a strong, stable and understandable currency.
The national coin will also allow the government to monitor operations, thereby preventing tax evasion and money laundering.
Does this contradict the original ideals of the crypto-currency world? May be. But one thing is to make small private payments using crypto currency, and another is to completely eliminate the money issued by the central bank and conduct completely anonymous transactions on a corporate scale. The social costs associated with financial crimes will be too high, and the global economy, as we know it, can plunge into crisis.
Moreover, even if these problems can be solved, full decentralization takes time. Probably, we should not expect that the world of fiat currencies will turn into a crypto-currency one overnight.
State digital dollars would serve as a bridge for the two worlds and would allow harmonious coexistence and mutual infrastructural support in the interim period. Can the world go completely to a world economy using only crypto currency, remains to be seen. As far as it is good, it remains to be proved.
The states have already dealt with their own crypto-currencies: Russia hopes to release its own cryptor, Kyrgyzstan wants to create a crypto-currency provided with gold; The Swedish Central Bank offered an electronic crown, and China may be ahead of them all, starting to try to create an internal crypto currency, which will exist along with the yuan.
Singapore can win the most
Singapore also participates in the race. In 2016, the Monetary Authority of Singapore (MAS) announced the launch of the Ubin project, a prototype payment system on the Ethereum platform. Its task is to provide local interbank transactions using Tokenized Singapore dollar. The project involved large financial institutions, including DBS Bank, UOB Bank, OCBC Bank and technology companies.
Two phases of the project have already been successfully completed, prototypes of software have been launched, which allow efficient transfer of funds, protect confidentiality of transactions and reduce risks. The experience gained by the project participants will open the way for further work on the digital Singapore dollar (for example, the introduction of scaling and cross-border payments).
One can only surmise whether Singapore is ahead of other countries that are striving to create a national crypto currency, but it is important that if he wants to become an intellectual financial center, he needs victory in this race.
It should direct more resources to create a powerful block-hub that will provide economies of scale and attract even more talented developers, creating a positive feedback loop.
The successful launch of its own stable crypto currency will allow this country to retain the pioneer's advantage, improve financial security and develop infrastructure for a prosperous ecosystem of detachment. This, in turn, will lead to a wider adoption of crypto-currencies, the dominance of financial technologies and economic prosperity.
