Let’s at admit it, bubble or not, cryptocurrencies are here and will continue to stay and represent a new means of wealth creation.
But, the big question is: are nations ready and able to adapt to this new economic reality fast enough? Are they ready to become true Crypto Nations?
Crypto Nations are countries or states that embrace cryptocurrencies, regulate them fairly and tax them accordingly. These are countries that use cryptocurrencies to power multiple levels of their economies, workforce; improve capital formations and value creation and political impact at an international level. While this is not possible to achieve overnight, some countries are further along than others.
Most countries can only toy with the idea of a national digital currency, but it’s not clear whether or not this will actually be adopted. It will be especially difficult for countries whose digital currencies are not decentralized.
Regardless, there are many fields where governments could invest in blockchain-powered programs that could positively impact their people. A good example of this would be Estonia where e-residency, identity and credit registry and certification are being implemented. These could be decentralized and carried out on the blockchain straight to the citizens themselves. Groundbreaking projects could be used to empower citizens and governments. And, in case of national emergencies, donations could be converted to cryptocurrency.
Becoming a Crypto Nation is a big deal because, if countries do not compete for the wealth and value generated from this technology, and if they do not and are not able to harness the talent needed, they will fall behind other countries that are. It ‘s interesting to note that “smaller” countries understand this opportunity better than the more developed one.
Singapore, Estonia, Hong Kong an Switzerland are just among the few countries moving up to becoming crypto nations. But what does it take for a country to become a ‘Crypto Nation’?
- The first thing that a country or nation that wants to embrace this technology should do is to encourage its citizens to own cryptocurrency. The best way to do it is by setting an example. Owning cryptocurrency is the very first step to understanding and debunking all the negative press around it. Governments should encourage its officials to own crypto wallets and provide them crypto assets as well.
- Next, governments have to step up their technology, tech skills, tech staff and budgets. It’s also important to invest in future talent. Then, the education system must teach all fields of engineering to young children. Training children by games and mobile apps will help them understand the value of digital assets. Governments also need to invest in infrastructure to support the industry, such as electricity.
- Banks and Central banks need to understand that not all businesses related to cryptocurrency are shady. It is okay to manage a crypto business so long as they abide by rules and regulations imposed by the authorities. Banks are not going to go away anytime soon, despite many people saying so. In fact, banks may become key players to upcoming crypto users. Cyptocurrencies are not a replacement for money or banks, but a fuel for a new type of economy that is growing right in front of us.
Among the developed countries around the world, Japan seems to be well ahead in the game by declaring a legal tender for Bitcoin and expressing support for registered exchanges and allowing entrepreneurs and investors to make a viable business out of it.
Israel, in contrast, may be a hi-tech powerhouse but its government and financial institutions make it virtually impossible for investors to deal with anything cryptocurrency-related.
In all fairness, not everything is dependent on governments and regulators. Other stakeholders play an important part in this as well. The media also have to exercise responsible and fair reporting with regards to this matter. The investor community should not dismiss or belittle entrepreneurs or businesses introducing crypto projects to them. Companies that are involved in the crypto industry should set higher standards and help the authorities understand the industry better.
Photo by Mateusz Dach