A new type of cryptocurrency may soon do what no cryptocurrency has done before: become part of a city’s economy. Here’s an introduction to City-Cryptos.
Following the launch of the Bitcoin network in 2009, other forms of cryptocurrency soon developed. None have been successfully integrated into any national, regional, or local territory. On the contrary, nationalized fiat currencies maintain global economic dominance.
Cryptocurrencies face many disadvantages. They lack government backing, are not accepted for use within the general economy, and only a minority of individuals own them. Fortunately, a new form of cryptocurrency is emerging that may overcome these difficulties.
These cryptocurrencies are designed for use within a specific city or group of cities within a region or province. Several varieties have been announced throughout the world. However, none have been created or integrated into the cities for which they are being developed.
These “City-Cryptos” suffer from a lack of discussion within the general cryptocurrency conversation. In the sections that follow, we will articulate a general theory of “city-cryptos” in the hopes that other researchers and writers might expand upon the ideas.
Currency and Geography
Currency is most often issued by a central bank and loaned to a national government at interest to be used by people in that nation. However, currency issued by one national government may be used in another nation or converted into another national currency. As well, national currencies are not the only type of currency. There are a variety of regional, and other local, and other geographically based currencies.
Most important, cryptocurrencies originally developed without geographic restrictions. At first, this appeared beneficial, but it has since hindered their social integration. One rare exception is the Venezuelan Petro, issued by the Venezuelan government for usage within the nation of Venezuela.
The Petro was created by the Venezuelan President to compliment Venezuela’s fiat currency. Currently, it is the first and only cryptocurrency to be issued by a national government. It’s dependence on the fiat Bolivar, however, makes full social integration of the Petro impossible.
Full social integration of any currency can only occur if that currency is integrated into society on its own accord. If a currency remains dependent on another currency, its integration into society is limited. Full integration requires independent usage of a currency by a group of people within a given territory.
From the Nation to the City
Nationalized cryptocurrencies may not be the best place to start if the aim is full social integration, for a variety of reasons:
- The need to integrate the currency across a large territory full of many regions, cities and other localities require heavy costs, infrastructure, and coercion of the population.
- Inter-generational acceptance and usage of a national fiat currency by the population may not be easily overcome.
- The full elimination of physical legal tender (paper bills and metal coins) of a national fiat currency may not be feasible in all, or any, national territory.
- People in a nation, or parts of a nation, may continue using the national fiat because they are used to using it, even if the nation makes the usage of that fiat illegal.
Developing city-based cryptocurrencies within cities is more feasible. They correct for the problems above in multiple ways:
- Elimination of legal fiat tender can occur more easily in a smaller population within a limited geographic territory.
- Successful and failed attempts at integration can be studied on a city-by-city basis to determine best methods for integration in other cities the future.
- The usage of illegal forms of fiat can be more easily dealt with in a single city than across an entire nation full of cities, towns, villages, and other municipalities.
City-Cryptos and True Integration
“City-Crypto” defines a cryptocurrency developed for use within a city by a government or social engineers and architects to replace the fiat currency currently in usage. Only non-complimentary city-cryptos can be fully integrated into society.
A complementary currency exists to help another currency in some way. Non-complementary currencies are used independently of another currency.
Often, complementary currencies emerge when a nation faces a recession, depression, or other economic crisis. For example, in Venezuela, the Petro was created to help overcome the economic turmoil faced by the nation, including the hyperinflation of the national fiat currency.
The integration of these complementary currencies is usually temporary. Once the economic hardships end, they are no longer used. To offer another example: during the American Great Depression, several states issued complimentary currencies to help reduce hyper-inflation affecting the dollar, but when the Depression ended, these currencies died.
If a city-crypto, or other local currency, is designed as a complementary currency to a national currency, its integration is limited and likely short-term. Full social integration is not possible. Even if the city-crypto remained permanently, its dependence on another currency would limit its usage.
Two Types of City-Crypto
1. City-cryptos to be integrated into cities that already exist
An example includes the “Gyeongbuk Coin” which is to be integrated within nine cities in the Gyeongsangbuk-do Province in South Korea. Currently, this province is one of several in South Korea to use gift certificates as local currencies to complement the national Won. As such, the Gyeongbuk Coin will replace these fiat-based gift certificates to compliment the Won. Thus, full social integration of the Gyeongbuk Coin remains impossible; on the contrary, its integration will be limited as an extension of Won.
As of yet, no non-complimentary city-crypto has been announced for integration into a currently existing city. Though it is possible that non-complimentary city-cryptos may be integrated into cities across the world, there is no plan in place for such an occurrence.
2. City-cryptos to be integrated into ‘future cities’
Plans to built cities that will use a cryptocurrency designed for the economy of that city have been announced. Akon Crypto City in Senegal is an example of such a city. The Akoin, a cryptocurrency currently in the ICO stage of development, has been announced for usage in the economy there. It will not be dependent upon the West African CFA franc, the fiat currency used by eight West African countries, including Senegal.
If Akoin Crypto City is completed according to this original plan, full social integration of a cryptocurrency into society will be observed. would mark the beginning of what could become a very important change in the world of cryptocurrency as well as local and global economies. Support for the development of this city encourages the beginning of full social integration of cryptocurrency.
City-cryptos have the potential for full social integration. However, if the city-crypto is complementary to a national currency, its integration is limited and possibly temporary. Fortunately, there are examples of projects-in-development that can facilitate the full social integration of city-crypto. One such project mentioned in this article is Akon Crypto City.
What are your thoughts on city-cryptos? Do you think this is the best route toward full social integration? This is still an emerging topic, and all opinions are needed.