Wednesday 12 June 2019 11:28 am

Are ‘sovereign’ cryptocurrencies an exploitation of blockchain technology?

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Blockchain, a multi-network system, enables a peer-to-peer monetary ledger to be constructed, recording all transactions that occur. This transparent, immutable, open-access record of financial flows disrupts the conventional belief that central-control is needed for money to work. Thus, some of the key attributes of blockchain-based cryptocurrencies are that they promise economic liberation, have no political agenda and remove the need for burdening third-party authorities. Until now, the U.S. has had a firm grip on the global financial system, particularly in relation to states it has deemed as rogue (Iran, Venezuela, Cuba, Sudan, Syria and North Korea). So what happens when a new monetary system threatens this control?

More than half the world’s global monetary reserves and exchanges are in dollars, allowing the U.S. total control of its trade and budget deficits. Further, the U.S. dollar’s heavy involvement in numerous sanctions, coupled with its access to the Society for Worldwide Interbank Financial Telecommunication’s (SWIFT) messaging system asserted unprecedented power into its hands. Put simply, a mere blacklisting of a country by the U.S. could essentially debilitate a country’s economy, currency and trade relations; prime examples being the rogue states.