What are "govcoins", and how they could change the world economics

Take a look at the future: "govcoins". Technological change is turning finance on its head, from fintech to decentralized economy to critical currencies. Keep reading for more information!

Take a look at the future: "govcoins". Technological change is turning finance on its head, from fintech to decentralized economy to critical currencies. Keep reading for more information!

The financial disruption that has received the least attention could be the most revolutionary: digital currencies, issued by central banks or governments. These "gobcoins" are the new incarnation of money. They promise to make finance work better but also to redirect people's power to the state, alter geopolitics, and change the way capital is allocated.

These are digital currencies, issued by central banks or governments.

These currencies would have the particularity of centralizing power in the State instead of spreading it through networks or handing it over to private monopolies. The idea is simple: instead of having an account in a bank, the individual will have it directly with a central bank via an interface that resembles an app. Instead of writing a check or paying online with a card, the cheap central bank network of channels could be used. And the money would be guaranteed by the state.

More than 50 monetary authorities, which represent the bulk of global GDP, are exploring the issue. For example, China has implemented its pilot e-yuan with more than 500,000 people, the European Union wants a virtual euro by 2025, and the United States is developing a hypothetical e-dollar.

China has implemented its pilot e-yuan with more than 500,000 people

A motivation for governments and central banks is that they fear losing control. Currently, central banks use the banking system to amplify monetary policy. If payments, deposits and loans migrate from banks to privately managed digital territory, central banks will have serious problems managing the business cycle and injecting funds into the system in a crisis. Unsupervised private networks would become the Wild West of fraud and privacy abuse.

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