Money is experiencing its next most important transformation of our technological age. (Credit: EpicTop10.com)
Famous Mexican actress Maria FÃ©lix put it bluntly: âMoney is not the most important thing in life, but it calms the nerves.
Others say that money does indeed make the world go round. Truly, it has been the instrument of barter and exchange of the goods of mankind since time immemorial.
Moreover, money has long been a tool of speculation, illegal gain, corruption and brutal exploitation. Bright minds are now suggesting that political corruption can be avoided through digital currency. Puerto Rico may be on such a trail.
HARD CURRENCY – Paper money is based on faith, a collective agreement to value something that has no value otherwise. This is more true than ever on our side of the world. In the 1970s, President Richard Nixon abolished the gold standard as a valuable support for the US dollar, presumably to ward off speculators.
Why this sudden interest now in virtual currency? The historical evolution of money tends to be more and more portable. Advances in technology now allow users to carry digital currency on their mobile devices, just like a wallet from days gone by.
BITCOINS – Money is experiencing its next most important transformation of our technological age. It is redesigned for digital cashless payments such as Bitcoin, altcoins, and cryptocurrency. All three still encapsulate the essence of money.
Bitcoin was âinventedâ in 2008 and released as open source software a year later. This new tax paradigm has moved money away from banks and hard currencies. According to Coinkeek, Bitcoin is once again a trusted value system in a network dedicated to processing monetary transactions through a system called Metanet.
Meanwhile, more and more cyber money continues to emerge these days, such as Ethereum (ETH), Ripple (XRP), Tether (USDT), and Litecoin (LTC). They are financial assets regulated only by electronic encryption, not by banks.
PORTO RICO – The Commonwealth has shown interest in becoming a hub for digital assets and blockchain investments.
Puerto Rico’s capital gains tax does not include cryptocurrency investments.
While not official policy, politicians in the Legislature have also recently expressed the possibility of using blockchain technology to tackle political corruption. House Speaker Rafael HernÃ¡ndez confirmed to Bloomberg that lawmakers are keen to meet with blockchain experts to research a virtual currency infrastructure for transactions with public finances. Hopefully this would bring more accountability to government funds and help “jumpstart” the economy.
HernÃ¡ndez reportedly said Puerto Rico has a financial credibility problem and expects the government’s use of digital money to be part of the solution.
CHAIN ââOF BLOCKS – Other countries are already avoiding corruption thanks to blockchain technology. It includes a system in which a record is made of every bitcoin or other cryptocurrency transaction on multiple computers, providing transparency and security.
The United Nations Agency on Drugs and Crime has advised the Kenyan government to use blockchain for anti-corruption purposes. Additionally, the Danish Foreign Ministry released a report in 2020 explaining the use of technologies such as blockchain, big data, crowdsourcing, and e-governance to tackle mismanagement and political corruption.
On the contrary, Russia bans government officials from using digital assets for fear of illegal financial activities. All of this means that the blockchain is not yet a proven and foolproof system. It requires further validation and development.