Multipolarity leads countries to buy cryptocurrency

posted in: Business, Opinion

In the upcoming age of multipolarity, countries should buy a cryptocurrency to secure trade connections. The benefits include holding open transaction volume for international trade and increasing the velocity of money within the nation.

Cryptos can be used very cheaply for small transactions equivalent to cash with more reach. A country can enable its citizens to trade nationally and internationally with the use of stable, internationally used coins. Balancing security, risk, and compliance requires implementation with tools and services that are available today.

Conformance with Anti Money Laundering Rules

The laws on anti-money laundering (AML) and know your customer (KYC) rules places some restrictions or limits on what you can actually do. One approach is to minimize risk by setting transactions limits of $500 USD or less per day per customer. This is enforced through State run or State sanctioned exchanges that regulate the volume and transactions a customer, a user, or a citizen can perform.

Low risk approaches provide a firewall that help to avoid non-compliance for failure to implement AML and KYC rules.

Typically, a 10,000 USD transaction requires reporting, a lot of people who tried to evade money laundering rules will try to send out transactions less than 10,000 USD such as not be caught in a reporting loop and enabling compliance with international rules. Transaction rules and monitoring will help governments with indicators and signals of suspicious activity.

If someone or some group was really trying to launder, they could hire an army to aggregate transactions. This is mitigated by setting a maximum amount per transaction making it less feasible to be used in a non-compliant way. Governments can also regulate transactions at the withdrawal window. For example, by placing limits on the total amount of the cryptocurrency anyone can withdraw into National Currency per day, month, or year.

Implementing a State-run Crypto Exchange.

To get started a State or National Crypto exchange would decide to implement laws that enable swaps of a supported coin for National Currency. This also requires implementing systems that support these transactions or swaps.

One basis of support is the currency amount invested and the percentage of the available equity the State holds in the coin and its network. To build equity the State would buy, hold, and sell the cryptocurrency that they support effectively becoming a market maker for a limited slice of the network’s capacity.

Another basis of support is to contribute to secure continued stable operations of the network. This is done by implementing operating infrastructure of the coin including computer hardware, software, and interconnections necessary to keep the network operating. Implementing mining machines, validation machines, and power management for that crypto carries the benefit of additional income from transaction fees and mining rewards.

Governments enable swaps to registered customers or citizens through their public key in association with Name and other personally and nationally identifying information. The registered account holders can buy and sell up to the rate limit of 500 USD or less daily in conjunction with an annual limit.

Sub organizations such as commodity traders within the State can add value by exchanging real goods or commodities for the licensed Crypto. For example, 1kg of wheat for X #LTC.

The totally available volume per day is also limited to availability of the coin at the central bank handling swaps. The price of these coins would average around the amount in national currency the bank paid for the coin. The total availability of the coin is the amount the bank has bought minus the amount sold.

To reduce the risk level further, one would set a maximum amount the county can hold in its exchange. This dynamically controls the national transaction rate. When the country reaches its hold limit it cannot buy more of the coin unless selling occurs to reduce capitalization. Likewise, there may be lower limits by which sell of additional coins would stop due to existing future obligations.

Choosing The Crypto Currency to Adapt

Choosing the right Cryptocurrency will require some analysis. You want one that is already widely supported and not necessarily one you control. There is also some metrics to consider such as the rich list, the network hash rate, The transaction speed, international distribution and available of exchanges, the cost per transaction, and the investment needed to buy into the network.