Just had a thought on creating a digital nation and admittedly I am still just fleshing out the idea so bear with me.
Crypto currencies still have a chance at succeeding, but the issue commenters and the public continue to overlook is that as currencies, Bitcoin, Ethereum, Ripple, and whatever the hell else is out there have no underlying political economies to support them. Currency valuations transmit to the world the value and/or level of economic output a nation has. Bitcoin, for example, is not a nation’s currency. If it were, it would give Zaire’s currency volatility a run for the money. With the advent of stablecoin, particularly Facebook’s expected issue of the digital coin in 2019, we could see the beginning of a truly digital political economy.
Stablecoin is defined as a cryptocurrency pegged to some reserve currency like the U.S. dollar or another crypto currency such as Ethereum. No matter the model, the goal is to provide users with some stability in the coin’s exchange price. Consumers and investors may like the convenience of not having to check Bitcoin’s price every time they want to buy a cup of coffee or make a currency exchange. Stablecoins, at least in theory, helps to avoid all that.
Facebook will reportedly first play in India’s remittance market. As we descendants of the Commonwealth are all to familiar with, the remittance process can be emotionally taxing when the lack of necessary middlemen are not in place to get money to our relatives in Europe, Asia, and the Caribbean.
The blockchain technology platform that Facebook’s stablecoin will use is expected to provide the transparency and peer-to-peer capabilities that ensure that monies are sent and received under a system of trust, verification, and lack of intermediaries.
But I can see Facebook and even Amazon going beyond playing a relatively minor role in a country’s payment system. Not only could Facebook or Amazon issue digital currencies in the next ten years, they could and should go all out in developing their own digital nations.
Facebook could finally add some meat to his currently weak mission of “connecting the world” by leveraging every business and consumer in his network to engage with each other commercially by using his stablecoin. Consumers subscribing to Facebook or Amazon could be assessed annual membership fees or be charged a “tax” substantially less than the average state or local sales tax in exchange for exclusive access to every merchant listed on either platform with the medium of exchange being a stablecoin.
As one of the largest companies in the world with a 2.5 billion people user base, Facebook, via commercial exchange on its platform, can generate the value necessary for traders in currency to express enough faith in the currency to trade in it drive up its value. Unlike current crypto currencies, a “Facecoin” could exhibit more organic and trustworthy movement because it would be backed by a company large enough to be a national economy.
As for local, state, and federal governments, they could be left a few decades from now with nothing left to regulate and tax but physical infrastructure. Would government be understanding and wish more and more taxpayers a fare thee well, or would government act like the pharaoh in the Old Testament, chasing the people with its tax chariots.
The ensuing issue may be the legal relationship between the old State and the new Digital State that online platforms like Facebook and Amazon will hopefully morph into and how best to treat citizens who have to spend time in both worlds.