“If Crypto will define the future, I want it to be exploited, struck and do in the United States,” said President Donald Trump at the Bitcoin conference last July in Nashville. This friendly position marks a complete approach to Trump’s position during his first mandate; In a tweet in July 2019, he expressed his aversion to cryptocurrencies, saying that their values were “very volatile” and “based on thin air”. Although probably inspired by a search for political gain, or the tens of millions of people he has carried out on his own $ Trump, Trump’s overthrow reflects increasing support in the world of northern worldwide for friendly policies towards non -traditional currencies.
These innovative currencies arise in two main forms: cryptography and digital currencies. Countries like the United States, the United Kingdom and those who include the EU have robust cryptocurrency markets with trading volumes combined in billions of Billions, and most are simultaneously in the process of evaluating the adoption of digital currency. It is important to highlight the differences between these two forms: digital currencies are simply existing cash currencies exchanged in electronic form and supported by central banks, while cryptocurrencies are a negotiable commodity not supported by or depends on a central authority. This means that monetary policy influences digital currencies in a similar way to traditional cash; The central banks maintain control of the digital money supply and interest rates. Conversely, cryptocurrencies are negotiated in turbulent markets and, if they are accepted as legal obliges, have the potential to be much more disruptive towards the autonomy of the Central Bank. As negotiable goods, their values are much more volatile than existing forms of money. The central banks of countries that adopt cryptocurrencies would find it difficult to stabilize their values and to face pressures from companies, investors and other international players. This is particularly true for less developed countries with smaller central banks and lower regulatory executives.
International regulations seem to be the natural means of solving this problem. However, the nations about to direct discussions on the development of new cryptocurrency regulatory institutions are almost exclusively very developed countries in the world which already dominate existing international financial institutions. Inequalities in international institutions are starting at the structural level. Consider the International Monetary Fund (IMF), where the Member States receive a share of voting power proportional to their annual financial contributions. The United States most contributes to all member countries and therefore holds around 18% of the total IMF voting power. Many decisions that the IMF takes require a supermajority of 85%; As such, the United States has a unitary right of veto on one of the most influential international financial institutions. The poorer and less developed nations find it difficult to make their voices heard.
International regulations are the standard in our existing economic order. But if the Northern world is creating a new cryptocurrency regulator which continues to strengthen existing paternalistic inequalities, the autonomy of the central bank in developing countries would be injured. Countries with smaller central banks already have less liquidity and a more limited money supply, which makes them intrinsically difficult to deal with unpredictable markets and economic crises. The adoption of cryptocurrency combined with unbalanced regulations could worsen existing developing worlds in development.
To help fight or even prevent this situation, the international community ends up with two options. The first would be to create a new international financial institution responsible for developing and managing a complete and fair set of cryptocurrency regulations. This body must be structurally different from existing regulators. Unlike the IMF, it should raise the under-represented world South by offering a more equitable distribution of voting power, not a base based on existing wealth or hegemonic power. It must promote a cooperative environment so that nations work together to ensure that the issuers of cryptocurrency assets work in universal governance frameworks with appropriate levels of responsibility and transparency. With an agency like this, including the prospects of developing countries, to stabilize the values of cryptocurrency, the world South would be confronted with less obstacles to the acceptance of cryptocurrency and would also have a seat at the table to combat future financial innovations, helping to reduce paternalistic inequalities as a whole.
Unfortunately, history has shown that the creation of an institution like that described above is a difficult task. It seems unlikely that the framework of a new international cryptocurrency regulator would deviate from existing organizations dominated by points of view and policies of the Northern Mondial. This leaves a second more controversial approach: the absence of a regulatory institution of cryptocurrency. Without an international organization to perpetuate systemic inequalities, the countries of the North and South world would be free to create their own regulations and agencies adapted to their specific needs.
“This leaves a second more controversial approach: the absence of a regulatory institution of cryptocurrency entirely. No international organization would perpetuate systemic inequalities, the countries of the North and South world would be free to create their own regulations and agencies adapted to their specific needs.”
Say’s cryptocurrency continues to increase in popularity worldwide, and developed countries with richer central banks accept more and more different cryptocurrencies as a tender. The government of a smaller and developing country in the world could decide to do the same, in the hope of following the current finance trends. This decision could promote international trade and increase interior investments, but it would also weaken the strength of the central bank of the country. Alternatively, the country could choose to protect its autonomy from the central bank and to prohibit the internal acceptance of cryptocurrencies as a call for tenders. This, in turn, can exclude the country in the development of financial markets and make international transactions more difficult. However, the government and the central bank of this country retain sovereignty over their monetary policy to make this decision without interference from the institutions dominated by the Northern World.
International institutions are often presented as a means of leveling the rules of the global financial game and reducing inequalities caused by major open markets. However, existing regulatory organizations are exactly the opposite, subjecting developing nations in the world in the world by perpetuating the inheritances of colonialism and paternalistic trends. While the world is considering the creation of an international regulatory framework of cryptocurrency, perhaps the aphorism “less is more” is the most viable option for the international community to protect the autonomy of the central bank and raise the world in development.
