Central banks and government authorities have been eager to join the blockchain revolution for years, as they want to take advantage of the innovative technology to create national currencies in the digital platform that are easier to track, issue, and use. The latest country to embrace the idea comes from Africa, an emerging region when it comes to these matters.
In fact, Tunisia is becoming the first nation to begin the migration of its national currency to the blockchain ecosystem. With the help of a Russian company named Universa, the African country will start moving its primary payment mean to the digital platform.
Meet the E-dinar
Universa will be the main driver in helping Tunisia to manage the nation’s Central Bank Digital Currency, or CBDC, according to a report coming from a Russian news outlet, Tass, in recent hours. The asset will be named E-dinar and the expectation is that it will be significantly easier to use, more transparent, and cheaper to issue.
The Central Bank of Tunisia was the entity behind the announcement of the digitalization of the country’s national currency, the Tunisian dinar. For some people, understanding how it works may take a while, but the fact that authorities decided to make the leap speaks volumes about the nation’s futuristic and modern approach. The asset will be issued on the Universa Blockchain.
For its contributions as the platform hosting the e-dinar, Universa will receive, according to the report, an unspecified percentage of the transactions performed in the ecosystem. It is said that the ledger will remain visible to Tunisia’s central bank.
Whilst it is clear that the platform is indeed blockchain-based, there has been some confusion in some circles about the nature of the currency. Regarding that, the CEO and Founder of the Universa firm, Alexander Borodich, clarified that the electronic money should not be considered a cryptocurrency.
This particular CBDC is going to be backed by paper money and will be managed by the state. Among the advantages of using the blockchain technology will be counterfeiting protection, cheaper issuance, and added transparency, the latter element being always welcome at all levels.
Borodich stated that “digital banknotes cannot be counterfeited — each banknote is protected by cryptography like its paper counterpart has its own digital watermarks. Furthermore, the production of such a banknote is 100 times cheaper than wasting ink, paper and electricity in the printing process.”
It Is Not a New Currency
According to the explanation, it becomes clear that Tunisia will not be issuing a new currency. Instead, the state will move a sizable portion of its reserves to the blockchain platform managed by Universa. People in the nation will be able to exchange physical currency for e-dinars at any moment they desire.
Borodich thinks that once the system is up and running, it will change the way private banks operate, and that is true for future cases, as well. The physical assets will remain at the central banks, and private agencies will compete for quality and services only.
By Andres Chavez