What kind of problems can solve the national cryptocurrency (or its elements) in Ukraine?
This week the founder of the KUNA exchange, Mikhail Chobanyan set the deadlines for the creation of Ukrainian crypto-UAH. I know Michael for a long time as a professional in his niche and as an excellent manager. I’m sure almost everyone from the Ukrainian fintech networking can say the same about him. I believe in his success, but I would like to tell you about another idea — the creation of cryptocurrency by the state itself. How is it at all and why does Ukraine need it if there are other pressing problems? I tell on the basis of real cases.
The important notice: I won’t speak about cryptoUAH itself, which is a project from business, but about cryptocurrency as a state project. It is important not to confuse it.
Yes, the very idea of Bitcoin and other cryptocurrencies is a way out of the control of regulatory representatives, the creation of a free alternative with all the consequences. But the technical implementation of this technology provides an alternative not only to international business, but also expands the capabilities of states. Including the regulation questions.
In fact, cryptocurrencies have established new rules for cash transactions. If the goal of issuing traditional currencies is to maintain a level of money supply that is relevant to the economic situation, then there is simply no such task in cryptocurrency. It created a new field in which the old regulations are not canceled, but simply are not needed. This is not a protest against the system, this is the creation of a new one. And the states, whose economies are developing and require effective control by the regulatory authorities (each has its own reasons) are required to create their own team in this new field. In other words — if you can’t control something, because you don’t know the language — it’s time to learn this language.
The real blow to the shadow economy
The shadow economy is an eternal Ukrainian problem that can’t be solved by the methods of the XX century. It just won’t help or even slow down. This fact is understandable in Israel, where, you will be surprised, there’s a huge turnover of shadow cash, which, according to The Times of Israel, is about 22% of GDP. Not so long ago, they announced the creation of a cryptoshekel, the cost of which will be formed on the basis of physical currency. Work on this was underway, but the authorities have postponed the release — financial experts have recommended waiting until such a decision is launched from someone else. Indeed, no one wants to do a beta test.
The digital shekel issued on the basis of the blockchain creates conditions for the transparency of monetary transactions. Israel isn’t China, where the entire Internet is under control, you can’t just ban Bitcoin, Ethereum and others. But to impose sanctions on it, new taxes, etc., while at the same time making the crypto-shekel profitable — this is easy. An excellent case for Ukraine, which has a similar trouble with cash.
Another investment tool
Examples of the Venezuelan Petro or the new Iranian cryptocurrency are not indicative — these countries are under sanctions, and therefore the development of the state cryptocurrency for them is a partial bypass of the restrictions for sane contact with the international economy.
A much more applicable example for us is Estonia, with its e-citizenship, in which it’s planned to make extensive use of tokens, through which proceeds the digital identification of residents i. Initially, many thought the country would hold the first state ICO in the world and launch an estcoin — but no, here is proof this was not in the plans. One way or another, Estonia is moving in the direction of the digital economy not in loud statements, but in a complex actions, and therefore, even if the creation of an estcoin was not real, the news about it attracted additional investments. Simplification of doing business and its digitalization are the main things here.
Synthesis of new rules
Thus, we see the idea of a national cryptocurrency doesn’t seem absurd. Now it’s being tested by the most “desperate” and marginalized states that simply don’t have a way out or a margin of safety for gradual innovations. In our case, the fact of creating a Ukrainian stablecoin as a business project is very correct — the state has another task. Following the example of Estonia and the thesis at the beginning of this article, we need not to break the old, but to build a new. Create a new infrastructure of financial relations, in which the regulator will prescribe the general rules of the game for all. And the first progress in this is already happening — to recall at least the draft law on the regulation of cryptocurrency. The liberal system creates competitiveness. And we can get development only in this way.