Economy

Tunisia Aims To Be A Pioneer In Blockchain Technology

Image: Tunisia flag, Pixabay

Tunisia is looking to be a pioneer in implementing blockchain as the country’s central bank explores the use of the technology for a national digital dinar, reports the Asia Times.

Image: Tunisian dinar, rusty_clark, Flickr

The Banque Centrale Tunisienne (BCT) and its newly appointed governor Marouane El Abassi are currently working with Walid Driss, the Tunis-based founder and CEO of DigitUS Tech, on the project. The Tunisian central bank has set up a working group to study blockchain, digital payments and cryptocurrencies overseen by Abassi and Driss serving as a founding member.

A blockchain-based, central bank digital currency could combat money-laundering, decrease the country’s gray economy, and at the same time, empower women and weaker segments of the Tunisian population, Abassi and Driss said.

Driss previously helped La Poste Tunisienne, the North African country’s postal service, to launch a blockchain-based digital payment system called DigiCash.

Tunisia follows on the footsteps of other countries looking to leverage blockchain technology to become cashless economies. The Swedish central bank (Sveriges Riksbank) is investigating a blockchain-based “e-krona” to serve as an alternative form of central bank-issued money as cash usage in the country declines. Almost 90% of financial transactions in Sweden are already cashless. Similarly, neighboring Finland predicts it will become completely cashless by 2029.

In the Caribbean, the Eastern Caribbean Central Bank is exploring the suitability of a distributed ledger technology (DLT)-based Eastern Caribbean currency to pursue multiple goals such as advancing economic growth, payments system resilience and financial inclusion.

According to a January 2019 report by the Bank for International Settlements (BIS) in Basel, Switzerland, at least 40 central banks around the world are currently, or soon will be, research and experimenting with central bank digital currency (CBDC) and other applications of blockchain.

A recent research paper by the World Economic Forum claims that central banks are particularly interested in the potential of blockchain in areas that include digital know-your-customer (KYC) and anti-money-laundering (AML) processes, trade finance, bond auction, issuance and other lifecycle processes, information exchange and data sharing, interbank payments and settlements, among other use cases.

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VC Fred Wilson Predicts “New Bullish Phase” in Crypto

Image: Fred Wilson, by JD Lasica, via Flickr

In his annual post about the new year ahead, prominent venture capitalist and Union Square Ventures (USV) co-founder Fred Wilson predicts cryptocurrencies will enter a “new bullish phase” fueled by the many projects set to come to fruition in 2019.

2018 was a catastrophic year for crypto investors who witnessed the so-called Great Crypto Crash, a massive year-long sell-off period that saw cryptocurrencies collapsed 80% by September 2018 from their peak in January 2018. 2019 should see the long period of difficulty come to an end.

“I think we are in the process of finding the bottom on the large, liquid, and lasting crypto-tokens. But I think that process could take much of 2019 to play out,” Wilson writes.

“I expect we will see some bullish runs, followed by selling pressures taking us back to retest the lows. I think this bottoming out process will end sometime in 2019 and we will slowly enter a new bullish phase in crypto.”

The catalyst for the next bullish phase in crypto will come as we see some big projects deliver on promises made in 2017. He cites some of USV’s portfolio companies including Protocol Labs, which is developing Filecoin, and Algorand, the company behind the Algorand project, which will likely release solutions in 2019. 

“I think we will see a number of ‘next gen’ smart contract platforms ship and challenge Ethereum for leadership in this super important area of the crypto sector,” Wilson predicts.

“I also expect the Ethereum open source community to ship a number of important improvements to its system in 2019 and defend their leadership in the smart contract space.”

Other areas where Wilson expects significant progress and consumer adoption happen this year are stablecoins, non-fungible tokens/cryptoassets/cryptogaming, and earn/spending opportunities, particularly in the developing world.

Stablecoins, which promise to solve cryptocurrencies’ volatility problem by being pegged to fiat currencies, were all the rage in the blockchain industry in 2018. A report by Bloomberg released in December 2018 suggests that Facebook is currently developing a stablecoin that will let users transfer money on its WhatsApp messaging app. The project will first focus on the remittances market in India, people familiar with the matter told the news outlet.

Echoing Wilson, Mati Greenspan, senior market analyst at eToro, forecasts that 2019 will be the year of tokenization. 

“As we move into 2019, we’re likely to see many more types of financial assets being tokenized,” Greenspan said in a statement.

“Most likely starting with stocks and ETFs, but just about anything that has a value can essentially be represented as a digital token on a blockchain, making it easier to transfer ownership directly from person to person instantly across the Internet.”

Greenspan also anticipates greater institutional interest in the crypto market.

“In 2018 we saw plenty of statements of intent from financial services incumbents, who are keen to provide crypto-related services for their clients… In 2019, the priorities for financial heavyweights include exchanges, ETFs and cryptoasset custody, more futures markets, and additional crypto related trading vehicles. As they enter the market, institutions will bring with them clients who want to access cryptoassets on their own terms, through a medium they are familiar with.”

Wilson expects regulatory pressure to continue this year and cites concerns over “actions brought by misguided regulators who will take aim at high quality projects and harm them.”

Like previous years, 2019 will continue to witness all sorts of failures, from scams, hacks, to failed projects.

“That is always the case with a new emerging technology that allows anyone to set up shop and get going. Permissionless innovation produces the greatest gains over time but also comes with the inevitable bad actors and actions,” he concludes.