In the virtual currency community, the idea of virtual currencies issued by central banks is not a new concept and has existed for as long as altcoins. Most of it has been all talk though some countries are now moving to make that a reality. A case in point is the South American country Venezuela which recently launched a national crypto known as ‘Petro’. As the name suggests the digital coin is backed by petroleum resources, which the country has in abundance.
Per reports attributed to the president of Venezuela, Nicolas Maduro, and which have not been independently verified, the Petro raised more than $735 million in the first 24 hours of the pre-sale round. Before its launch, it had been announced that the virtual currency would be used in making payments for gasoline, tourism and so on but so far there has not been any actual evidence in support of this. The opposition in Venezuela has even branded the token sale as an illegal way of issuing debt.
Not a real crypto
Some critics have also said that the Petro cannot be considered a real virtual currency due to its decentralized nature and have instead argued that it is more of a commodity exchange-traded fund or tokenized oil. The credibility of the Petro has been further dented by the fact that the issue of the blockchain network on which it will run on has not been settled.
Initially, it was reported that the Petro would be an ER20 token before other conflicting reports suggested it would be the NEM blockchain. But both the NEM blockchain and the Ethereum blockchain bear no records showing the purported sale of the reported $735 million at the time the pre-sale was said to have been conducted.
Iran’s idea shot down
Part of the reasons Venezuela alluded to for launching a national virtual currency included bypassing financial sanctions imposed by the United States. This is the same reason Iran is putting forward as it too considers launching its own crypto coin. The news was broken by Mohammad-Javad Azari Jahromi, the Iranian minister of information and communications technology in a tweet though this was later denied by the country’s central bank.
According to the central bank of Iran, the reason the country will not launch a digital currency is that of the likely high volatility as well as the fact that they are prone to pyramid-scheme tendencies. With the conflicting statements from the country’s authorities, a virtual currency from Iran is unlikely to materialize in the near future.
Turkcoin backed by sovereign wealth fund
Turkey is another country that is reportedly pursuing the idea of a national virtual currency to be known as ‘Turkcoin’. The idea was first mooted by Nationalist Movement Party’s deputy chairman, Ahmet Kenan Tanrikulu.
Unlike the case of Venezuela whose supposed national virtual currency is backed by petroleum resources, Turkey would have its digital currency backed by the Wealth Fund of the country. The Wealth Fund holds assets in some of the biggest public firms in Turkey including Turk Telecom and Turkish Airlines. That would mean that the value of Turkcoin would be based on the asset value of the Wealth Fund and consequently would rise and fall depending on the fund’s performance and holdings. In effect, this would make Turkcoin more of a security that is backed by assets as opposed to a decentralized digital currency.
Estcoin to enhance e-residency
One country which is being taken more seriously than others with regards to the development of a national virtual currency in Estonia which is planning on launching one to be known as Estcoin. The reason why Estonia is being taken more seriously is the fact that it has a highly developed digital infrastructure.
Estonia’s motivation for unveiling a digital currency has to do with the country’s e-residency program, which lets nonresidents get ID cards and obtain services in the country as well as conduct secure transactions. With a national cryptocurrency, Estonia believes it will make it easier and convenient for foreign entrepreneurs to conduct business digitally.
The head of the stock exchange of Switzerland, Robert Lacher, has also emerged as a strong proponent of national virtual currencies. According to Lacher a digital currency for Switzerland would benefit not only the country’s stock exchange but the Swiss economy as a whole.