0
⭐ Features
144 views

Can State-Backed Cryptocurrencies Work, Are They the Answer?

  • Darryn Pollock
    ⭐ Features

    Some regulators are going as far as to make their own cryptocurrencies, is this a viable option?

Can State-Backed Cryptocurrencies Work, Are They the Answer?
Cover image via u.today

When Russia firstly banned access to cryptocurrency exchanges and then announced that they would be launching a state-backed cryptocurrency called the Crypto Rubel, most were very suspicious and dubious.

But the trend is growing. Venezuela is ahead in the race of these state-backed coins, having launched a pre-sale of the Petro, an oil-pegged cryptocurrency launched by the government.

Now, even the Turkish government is mulling over perhaps building their own state-backed cryptocurrency as a way to maintain regulation and control over the burgeoning Blockchain and crypto space.

However, is this not an oxymoronic term, a state-backed’ and therefore centralized, cryptocurrency. One of the biggest appeals of cryptocurrencies is that they are decentralized and absent from control, but perhaps to fit in, this needs to change?

The issue with decentralization and centralization

Decentralization, when Bitcoin was still being discussed on cryptography forums with hushed anarchistic and liberal tones, was the shining light of possibility for the cryptocurrency. Financial freedom and the power to cut loose from the monopoly that had been built by central banks and governments.

It is also one of the major factors as to why those same banks and governments have feared Bitcoin, knowing that it has the potential to be a true competitor. However, it must be stated, that there is still a long way to go for Bitcoin or any other coin, to make banks and fiat currency obsolete.

However, cryptocurrencies have emerged from the shadows somewhat in recent times, gaining a huge amount of momentum and mainstream appeal. This has lead to regulators being forced to act and to do their job.

Some regulators are going with a hard-line approach, such as China with its blanket bans, others are curious but want it to fit into current legislation, which is problematic as a decentralized platform is hard to control. But overall, most regulators and nations want to encourage cryptocurrencies and especially Blockchain.

State-backed

In light of this keenness to see Blockchain thrive it is understandable why governments believe that a state-backed coin can be the answer. They are happy to see Blockchain thrive, and as such, cryptocurrencies, and also believe that they can regulate to their standards if they are the ones in charge of the new cryptocurrency.

However, it is good in theory but possibly won’t work. Already, the Petro is getting a lot of pushback and criticism, and now, the Russian Crypto Rubel is being touted as a potential non-starter.

The creation of a centralized coin, like the CryptoRuble, seems impossible, as cryptocurrencies are based on decentralized ledgers, Russian Finance Minister Anton Siluanov told President Putin, according to Russian media.  

Hard to get buy in

Regardless of the need for a balance between the crypto community, which is after decentralization, and the regulators, who need control, the idea of a state-backed coin, a centralized one, is a little too weighted to the regulators.

What is more needed is a positive regulatory body that maintains decentralization, but also holds cryptocurrencies under the legislative blanket of the country

In this Telegram channel you’ll find fresh news, interviews, infographics, forecasts & other helpful stuff. Join U.Today's channel.

About the author

Darryn Pollock is an award winning  journalist from Durban, South Africa. He picked up Vodacom’s Regional Sports Journalist Award in 2017 while expanding his Blockchain and cryptocurrency reach.  He is a contributor to Forbes, Cointelegraph, Binary District, and of course, U.Today. Darryn’s belief is that Blockchain technology will be the driving force of the next technological wave and it is the obligation of journalists and writers to tell its emerging story with integrity and pride.

👓 Recommended articles
0
📰 News
9604 views

You Can Now Pay with Bitcoin, Ethereum, or Litecoin on Amazon

  • Alex Dovbnya
    📰 News

    A new browser extension allows making payments on Amazon with the help of top cryptocurrencies

You Can Now Pay with Bitcoin, Ethereum, or Litecoin on Amazon
Cover image via 123rf.com

Amazon users can now buy goods with Bitcoin via the Lightning Network because of a new startup called "Moon."

According to TechCrunch, the company with a flashy name has just released a browser extension that will allow making payments on the biggest e-commerce platform. 

You can use any Bitcoin wallet with the Lightning Network support in order to make instantaneous transactions. For instance, Electrum, one of the most widely used Bitcoin wallets, now supports the popular off-chain scaling solution. 

👉MUST READ

eBay Is Rumored to Start Accepting Crypto Payments

eBay Is Rumored to Start Accepting Crypto Payments

Another option is to link the extension to your Coinbase account and make a payment with Bitcoin, Ethereum, or Litecoin while leveraging the API of the number one cryptocurrency exchange in the US. 

While Overstock.com, Newegg and some other major retailers have already embraced crypto, Amazon is yet to move in this direction. Moon makes the magic happen by converting crypto to fiat without charging additional fees. 

As of now, the service is only available in the US, but Moon soon plans to expand to other countries.     

👉MUST READ

Forbes: Japanese ‘Amazon’ Rakuten May Push Bitcoin to Future Highs

Forbes: Japanese ‘Amazon’ Rakuten May Push Bitcoin to Future Highs

Back in May, U.Today reported how Flexa's payment app Spedn allowed Whole Foods, Crate and Barrel, and other brick-and-mortar retailers to accept crypto payments.   

Subscribe to the official U.Today Telegram channel. Get news first!

About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with an extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets.

👓 Recommended articles

This site uses cookies for different purposes. Please set your preferences in Cookie Settings and visit our Cookie policy for more information on how and why cookies are used on this site. Click here for cookie policy

Cookie settings