With the rise of decentralized networks money flows are going to become more transparent while the intermediation of banks will become unnecessary. This is because unlike conventional money which is managed by banks and governments, alternative currencies are basically peer-to-peer meaning it?s the users who manage them one of the biggest examples of this is a wide adaption of?venezuela bitcoin.
Perhaps because of their inevitability some governments have taken a more welcoming stance towards virtual currencies. Last year in April for instance Bitcoin (BTC) was made a legal means of payment in Japan. And despite issuing threats of banning virtual currencies in 2017 the government of Russia adopted a more positive attitude resulting in President Vladimir Putin meeting the developers of Ethereum (ETH). Putin has also made a commitment of recognizing digital currencies this year.
In the world?s second-largest economy the People?s Bank of China had initially frozen Bitcoin withdrawals but the decision was rescinded last year in June which is attributed to the record highs that the digital currency went on to reach. In the United States on the other hand cryptocurrencies are gradually gaining acceptance as a store of value and a means of payment.
Down under the government of Australia has announced that virtual currency firms will be given a conducive operating environment as investors and traders will be exempt from services and goods tax. This is an indication that the popularity and use of virtual currencies for common everyday transactions is only going to rise.
Virtual currencies have however not been restricted to developed economies. In Venezuela Bitcoin has emerged as a leading parallel currency. It has thus served as a medium of exchange allowing citizens and residents of the hyperinflationary South American country to transact both internally and externally.
With Zimbabweans having similar experiences to Venezuelans, Bitcoin has also emerged as an alternative currency in the Southern African nation. Zimbabweans have especially adopted it in making online transactions as this is restricted by banks. Digital coins have also been used to send money to Zimbabweans by their country men and women in the diaspora. And due to their experiences with hyperinflation, virtual currencies are also being used by Zimbabweans as a savings tool.
Nigeria and South Africa
Two of Africa?s biggest economies, South Africa and Nigeria, have also adopted cryptocurrencies. In Nigeria for instance activists and local traders have been highly enthusiastic about the digital coins arguing that they are a way of democratizing the economy since conventional money has failed the citizens.
The decentralization that virtual currencies present is expected to spur development everywhere especially in third world countries. Unlike conventional money digital currencies do not generate interest and therefore hoarding them earns the owner nothing. Therefore the value is generated in exchanging them and using them in transactions. In the process producers of goods and services thrive.
It is also expected that in the future various digital currencies will come up to serve different purposes. This will help countries in withstanding economic shocks that occur every now and then and this will result in development that is sustainable and more equitable.
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