Alan Yong of DNotes explores how an established, ethical digital currency may be the most sustainable long term solution for Greece, and why digital currency enables anyone to access their money whenever they need it.
“This is a very sad and tragic situation. The rich may end up losing a vacation home in a foreign country but many of the less fortunate are at risk of losing their entire life savings, while being too old to rebuild their nest egg. It is even more depressing when no viable political solutions exist to give Greece’s citizens any hope of rebuilding their financial future” – Alan Yong, tech Entrepreneur and Co-Founder of DNotes.
Greece’s difficulty to live within its fiscal means has resulted in tough austerity measures in exchange for bailout money from the European Central Bank, causing Greek citizens great hardship. According to the former senior executive of PIMCO, El Erian: “Greeks have seen their living standards cut, unemployment is running at 26 percent, youth unemployment is over 50 percent and they’re about to face an even bigger depression.”
Small business owners unable to pay suppliers risk losing their business. Importers dependent on letter of credit facilities face an immediate halt to trading. Just like its citizens, the Greek government must also pay its bills. Its inability to do so could mean the reintroduction of a much devalued currency like the drachma, and there has been talk of creating their own digital currency.
Prime Minister Alexis Tsipras has suggested that the Greek government could issue their own digital currency in the event that the EU does not agree to eased conditions for Greece’s bailout repayments. Yong takes exception: “What Greece needs, is to adopt a global digital currency that is built with trust and integrity for everybody worldwide, so that anyone may participate regardless of financial or economic standing. If Greece chooses to return to a national currency like the drachma, or government backed digital currency, it is unlikely that currency would have much value outside of Greece. Greek citizens will fear that the new currency will be worth much less than their current euro deposits, and this will be counter-productive to preventing further bank runs. I believe that a digital currency that has its value set globally is the solution; a currency that remains stable regardless of local political turmoil.DNotes is that currency.”
The observed capital controls placed on Greeks by their government have raised serious questions about fiat money: if you are unable to withdraw your bank deposits from a bank, then is it really your money? This lost confidence in fiat currency is not unique to any particular nation. It is a global problem from governments printing more currency to cover their fiscal deficits, which devalues the money supply, taking value from citizens’ savings. This is compounded by the fact that fiat currency is created as debt whenever new loans are created by banks. Banks are only required to keep small fraction (2-3%) of their existing loan liabilities as ‘fractional reserves’. Fiat money is merely an ‘I owe you’ – fiat money is debt. Its value is negative. In the case of digital currency, the amount of new currency introduced to the system is fixed, and no external player, institution or organization has control over or may change this. Digital currency is created as proof of work done in a cryptographic process called mining, a process that verifies who owns each and every digital token. Digital currency is not created as debt like fiat is.
In a recent interview on Cointelegraph by Raunaq Vaisoha, DNotes Will Be Known as the Currency with a Purpose, Yong explained his passion to build a global digital currency. In this case, he envisions every Greek citizen being their own bank by taking advantage of digital currencies like DNotes to prevent another situation where people are unable to access their life savings. By making Greece the most regulatory friendly nation and the first to adopt global digital currency, Greece could be positioned to reap the immense benefits of Blockchain technologies and become the envy of other nations. It will be the catalyst of job creation and a huge draw for foreign investment. This will be a much better solution than any conceivable political solutions.
Yong concluded that: “Greek citizens would have near zero transaction costs with instant transfers to anyone, anywhere in the world, while enjoying the benefits from financial integration with creditors worldwide, and not just banks in Greece. This technology would encourage trade, create jobs for Greece’s unemployed, and lessen the impact of the Greek government’s poor political and financial decisions. Greece’s fortunes could better be reversed by treating its economy as a struggling large business that requires technological and efficiency changes and outside investment. DNotes is more than a global digital currency. It has created its own ecosystem by using highly scalable building blocks that can be deployed and ramped up quickly anywhere worldwide.”
“We live in a hyperconnected world rampant with digital revolutions, including digital currency. The DNotes community is at their best when challenged to passionately examine large social economic global problems. We are committed to positive and immediate response when there is local support with the right partnership.”
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