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More countries considering cryptocurrency

Coinbase IPO
Posted at 10:51 AM, Apr 23, 2021
and last updated 2021-04-23 14:18:57-04

More countries are looking to add digital or cryptocurrency to their economies.

The United Kingdom announced this week it's looking into “Britcoin” and whether it could work with its economy. If approved, it would be used alongside cash.

In the Bahamas, they already have a digital currency called the “Sand Dollar.” Bahamians can convert the digital currency into traditional dollars using a pre-paid card.

And in China, three cities are testing the electronic yuan.

Many countries are further ahead than the U.S. in the process of setting up a digital currency. The U.S. has only begun looking into the possibility.

Experts say right now, a digital currency isn't extremely appealing to the U.S. Most people who use cryptocurrency do it so their transactions won't be tracked. But that goes away if it's controlled by the government.

“They become fungible with regular currency. I know that will allow governments to achieve their objective, which is taxation and being able to track it. I’m not so sure that is going to be a factor that's going to make the crypto attractive for users and other investors,” said David Sacco at the University of New Haven’s Pompea College of Business.

Another thing about cryptocurrency that may make it less appealing is that its value is constantly changing. Right now, it’s not valued in the same way as traditional money. Instead, experts say it's valued and measured the same way as gold. That only makes the digital coin appealing to some countries.

“The less stable your currency is, the more likelihood that people in your country are going to levitate towards crypto because they think it may become more stable at some point. It's clearly not there yet," said Sacco.

Right now, the U.S. isn't in the position where it needs something like cryptocurrency. However, countries with stable economies may still be interested in preparing the right infrastructure for a digital currency, should they ever need it in the future.