Willis Asks Kevin About Digital Currency Stuff

Willis Asks Kevin About Digital Currency Stuff

Here’s another digital-age story. Last month, Venezuelan President Nicolas Maduro announced plans for a “sovereign cryptocurrency.” It will be known as the “petro” because it’s backed by crude oil. Maduro says Venezuela will raise $5.9 billion by issuing 100 million units of the new digital coinage at $59 apiece. Venezuela’s opposition-led Congress says this is illegal.


I don’t get it, and I’m not sure Nicolas Maduro does either, but apparently Russia, China, Iran, India, and Estonia are also considering some form of sovereign digital currency. I better ask Kevin Allison what’s going on.

Hey Kevin, what’s a sovereign cryptocurrency?

Good morning, Willis. It’s digital money that uses clever computer code to let people buy things without going through a bank or other financial intermediary. Bitcoin, the first cryptocurrency, was created as an alternative to government-issued fiat money. But a sovereign digital currency would be issued by the state — in the case of the petro, a government in Venezuela that has presided over disastrous hyperinflation.

How is a cryptocurrency different from the money in my wallet?

Your cash, known as fiat money, is backed by a central bank, which can fire up the presses and print more. Cryptocurrencies are backed by code, which makes their total supply a design decision. The total number of Bitcoins that can ever be “mined” was hard-wired into the programming from the start. Other currencies, like Ethereum, don’t limit the number, but that could change. Governments will have to decide whether their cryptocurrencies’ supply would be fixed or variable.

Why would a government want a sovereign cryptocurrency?

To revolutionize commerce and governance by creating a decentralized, tamper-proof method of registering changes in — OK, just kidding. Venezuela’s government probably just wants to raise cash, evade sanctions, and counter US influence. By cutting out financial middlemen like banks, cryptocurrencies exist outside the global payments system, which runs on the US dollar. While some countries are eyeing other benefits, there’s a reason why it’s Venezuela, Russia, and Iran that are most aggressively investigating sovereign cryptocurrencies.

Why would I want to buy a sovereign cryptocurrency?

You’re right to wonder. Is the cryptocurrency secure? Is it easily convertible into cash? Would transactions be anonymous, or would they be tracked? These are open questions.

Should I care about this?

It will create financial opportunities that might not be available today in countries with underdeveloped banking systems. We should all care about that. On the flip side, national cryptocurrencies might also make it easier for governments to track what you buy and sell. That should worry anyone who cares about privacy.

We believe in access for everyone.

https://ad.doubleclick.net/ddm/trackimp/N6024.4218512GZEROMEDIA/B26379324.311531246;dc_trk_aid=504469522;dc_trk_cid=156468981;ord=[timestamp];dc_lat=;dc_rdid=;tag_for_child_directed_treatment=;tfua=;gdpr=${GDPR};gdpr_consent=${GDPR_CONSENT_755};ltd=?
Visa: We believe in access for everyone. Image of a small, diverse group of people, smiling

Gaps in economic opportunities have made it hard for all individuals to take part in the global payments ecosystem. To address those gaps, society needs public policies to empower citizens, small businesses, and economies. That’s why, in 2021, the Visa Economic Empowerment Institute (VEEI) started conducting research and publishing reports about fostering digital equity and inclusion, unlocking growth through trade, and imagining an open future for payments. In 2022, we hope you’ll visit the VEEI for insights and data on the future of inclusive economic policies. See our newest stories here.

A year of Biden

Joe Biden’s first year as US president included two major historic accomplishments and a series of (often bitter) disappointments that has his party headed toward likely defeat in November’s midterm elections. Biden’s own political future is increasingly uncertain.

More Show less
Two children and a robot. We have to control AI before it controls us, warns former Google CEO Eric Schmidt.

Listen: Tech companies set the rules for the digital world through algorithms powered by artificial intelligence. But does Big Tech really understand AI? Former Google CEO Eric Schmidt tells Ian Bremmer that we need to control AI before it controls us.

What's troubling about AI, he says, is that it’s still very new, and AI is learning by doing. Schmidt, co-author of “The Age of AI: And Our Human Future,” worries that AI exacerbates problems like anxiety, driving a human addiction cycle that leads to depression.

Subscribe to the GZERO World Podcast on Apple Podcasts, Spotify, Stitcher, or your preferred podcast platform to receive new episodes as soon as they're published.

COVID has accelerated our embrace of the digital world. The thing is, we don't always know who’s running it.

Instead of governments, Ian Bremmer says, so far a handful of Big Tech companies are writing the rules of digital space — through computer algorithms powered by artificial intelligence.

The problem is that tech companies have set something in motion they don't fully understand, nor control.

More Show less

If omicron makes cases explode in China, the country's leaders will have to choose between weathering short-term or long-term pain.

Yanzhong Huang, senior fellow for global health at the Council on Foreign Relations, predicts that sticking to the zero-COVID approach at all costs will hurt the Chinese and global economy. In his view, learning to live with the virus is the way to go.

More Show less
The Graphic Truth: How do US presidents do in their first year?

Joe Biden's approval rating has taken a big hit during his first year as US president. Biden is now just slightly more popular than his predecessor Donald Trump at the same point in his presidency. While Biden has made a series of policy and political blunders that might be reflected in polling, this is also a sign of the times: US politics are now so polarized that presidential approval has a low ceiling. We compare the approval ratings of the last five US presidents in their first year.

Russian President Vladimir Putin attends a meeting with his Iranian counterpart Ebrahim Raisi in Moscow, Russia January 19, 2022.

Iran and Russia heart each other. The presidents of Iran and Russia have little in common personally, but they share many geopolitical interests, including in Afghanistan and Syria. They also have a common resolve in countering "the West.” These issues are all on the agenda as Vladimir Putin and Ebrahim Raisi held their first in-person meeting in Moscow. Raisi is a hardline cleric who leads a theocracy with nuclear ambitions. Vladimir Putin, meanwhile, is a wily autocrat who enjoys provoking America and Europe, and has ambitions to return to the glory days of the territorially expansive Soviet Union — as seen with the Kremlin's recent provocations on the Ukrainian border. With the Iran nuclear talks on life support and Joe Biden already bracing for Russian troops crossing into Ukraine, Tehran and Moscow now have even more reasons to scheme and cooperate. Indeed, Moscow and Tehran have increasingly been cooperating on energy and security issues (Iran might be buying Russian military technology) as their respective relations with the West deteriorate.

More Show less
Namibian citizen Phillip Luhl holds one of his twin daughters as he speaks to his Mexican husband Guillermo Delgado via Zoom meeting in Johannesburg, South Africa, April 13, 2021

2: Namibia’s High Court ruled against two gay couples seeking legal recognition of their marriages. The judge said she agreed with the couples, who are seeking residency or work authorizations for foreign-born spouses, but is bound by a Supreme Court ruling that deems same-sex relationships illegitimate.

More Show less

Subscribe to GZERO Media's newsletter, Signal

GZEROMEDIA

Subscribe to GZERO Media's newsletter: Signal

A year of Biden

Signal

Can we control AI before it controls us?

GZERO World Clips

Should China learn to live with COVID?

GZERO World Clips

China vs COVID in 2022

GZERO World Clips

GZEROMEDIA

Subscribe to GZERO Media's newsletter: Signal