Cryptocurrencies have been riding on some pretty rocky terrain lately and it remains to be seen what will happen should the first central bank-issued digital The money used in a particular country at a particular time, like dollar, yen, euro, etc., consisting of banknotes and coins, that does not require endorsement as a medium of exchange. be launched. In fact, Sweden has voiced its desire to release a national digital currency in the next couple of years. Given the country’s gradual decline in Money in physical form such as banknotes and coins. usage, the Riksbank – Sweden’s central bank – is exploring this scenario. The e-krona, as they are expecting to call it, is being imagined as a tool that will play the same role as the tangible krona today: a currency that is independent of intermediaries, accessible to every citizen and usable for any type of A transfer of funds which discharges an obligation on the part of a payer vis-à-vis a payee. regardless of its value.
Sweden is not the only country that has been looking into the possibility of launching a digital version of the national currency. The Bank of England, the Bank of Canada and the Bank of Israel have all set up working groups to better understand the implications of such a project and to evaluate the utility and need. Although they are all still at an exploratory stage, this could eventually come as a blow to cryptocurrencies around the globe in an age where ICOs (Initial A coin is a small, flat, round piece of metal alloy (or combination of metals) used primarily as legal tender. Issued by government, they are standardised in weight and composition and are produced at ‘mints’. Offerings) seem to be the hottest product on the market.
Bitcoin is commonly said to be a cryptocurrency, a digital means of exchange developed by a set of anonymous authors under the pseudonym of Satoshi Nakamoto, which began operating in 2009 as a community project (Wikipedia type), without the relationship or dependency of any government, state, company or body, and whose value (formed by a complicated system of mathematical algorithms and cryptography) is not supported by any central bank or authority. Bitcoins are essentially accounting entries i... has certainly been facing some difficulties in the past week after South Korea announced the possibility of shutting down all cryptocurrency exchanges – news that caused Bitcoin’s value to plummet by 25%. A final decision is expected to be released today on their fate in the country that is to host this year’s winter Olympics. But regardless of the outcome, these drastic fluctuations are proving how volatile and unstable cryptocurrencies are, pushing many experts to wonder if they will ever become a substitute to regulated, Money that is legally valid for the payment of debts and must be accepted for that purpose when offered. Each jurisdiction determines what is legal tender, but essentially it is anything which when offered (“tendered”) in payment of a debt extinguishes the debt. There is no obligation on the creditor to accept the tendered payment, but the act of tendering the payment in legal tender discharges the debt. currencies – fiat or digital.
Even one of the world’s most admired investors, Warren Buffet, has made it clear that he and his investment firm have no intention of going in that direction as they [cryptocurrencies] “will come to a bad ending”. Software giant Microsoft and digital distribution platform Steam have also ceased to accept Bitcoin as a payment tool because of its “high fees and volatility”.
So although there is now a lot of hype around the messaging app Telegram’s announcement of a soon-to-be-launched ICO – expected to be one of the biggest ever – it might be time to start wondering why a growing number of countries are counting on (or have already) imposing a number of restrictions and regulations on these anonymous and virtual “coins”. From China to Russia and now maybe even Korea, governments are cautious – and rightly so – about these “cryptos” who are looking less and less like a “currency” and more and more like a simple product of speculation.