Countries are intrigued by the huge opportunities emerging in the cryptocurrency market. What is more, the hope is that “cryptocurrencies” will revive the country’s economy.
As we know, so far the countries that have strongly supported “cryptocurrencies” are: east Asia for Japan and South Korea, southeast Asia for Singapore, Europe for Malta and Greece, South America for venezuela and so on. But some countries are in order to grow and develop, but some are desperate, unable to save the market. So can the state save the market by “parallel cryptocurrency”? Today, we will be a brief analysis.
Take the Greek debt crisis, for example. Greek Banks reported that they were working on an emergency plan for depositors to deal with creditors, and that they would have to come up with relative emergency measures to save the market if Greece were to gradually collapse. So Greece’s eyes turn to “parallel cryptocurrencies.” will Greece choose parallel cryptocurrencies?
Greece, in addition to being famous for the acropolis, is also internationally renowned for its debt problems. The root cause of the Greek debt crisis is that the competitiveness of the Greek economy is relatively weak, the level of economic development is relatively low among eurozone countries, and the economy is mainly supported by tourism. After the outbreak of the financial crisis, the number of tourists around the world has been greatly reduced, which has caused a great impact on Greece. At the same time, Greece exports less and imports more, and has a long-term trade deficit within the euro zone, leading to capital outflow, so it borrows to live.
legal or virtual currency
Forced to find a way out, Greece has no choice. The mayor of Agistri, Greece, has embarked on a bold “blockchain test”. The point is: a blockchain-based digital currency is the best option for tourists in Greece.
Events similarly – at the beginning of 2013, a small European country Cypriot government in order to get external rescue party benefits, such as the European Union, launched a severe deposits tax, capital controls, imposing a tax on bank depositors, tax rate is as high as 20%, the people of the backlash, in order to prevent property shrinkage, can the COINS as a store of value investment products, to buy the currency, then the currency prices from the original a few CNY, a once rose to 8000 CNY.
Instead, it seems, the external debt crisis has catalyzed the development of cryptocurrencies. But countries do not give up their legal tender for “virtual currency”. But what happens if they do both?
Let’s imagine that countries launch their own cryptocurrencies and start converting fiat currencies into cryptocurrencies, thus advancing their centrally managed programs to save the central bank from losing its edge on currency manipulation. Sounds like it’s still working.
But Greece lacks the resources to issue a legal cryptocurrency linked to oil or gold.
Instead, venezuela has done the same: it has announced the pre-sale of petrodollars, the world’s first legal digital currency.
By issuing digital currency, venezuela intends to solve the problem of legal currency inflation in the country, so as to save the danger of economic collapse and break through the economic sanctions imposed by the United States and the European Union.
But the situation is difficult to break through and reverse. After all, because of venezuela’s past “credit problems”. Petrocurrency is not only difficult to attract international buyers. But even venezuelans do not buy petrocurrency in large quantities. At the same time, the authorities have not perfected the details and rules of digital asset management. And the oil price remains low and output keeps falling. Making it difficult for “petrocurrency” to become a real currency.
It can be seen that all as capital economics analyst said. “virtual currency can not solve the fundamental problem of fiat currency inflation.” At present, there is no successful case that the cryptocurrency can successfully save the market. But it is more effective in theory, and more exploration and innovation are needed in reality.