Though many holders and traders are gleefully rubbing this year’s upturn in the faces of crypto bears, the memories of 2018’s cryptocurrency market crash have not faded away.
Might the steady acceptance of the underlying blockchain technology — by big business and governments alike — have played just as big a role in fuelling the market’s recent resurgence as institutional FOMO might have?
During the course of last year, blockchain covered ground in leaps and bounds, causing (mostly due to the tokenization trend) something of an international regulatory race.
With clear economic and profit-oriented objectives in sight, the SEC and similar regulatory bodies the world over got to work on mechanisms for monitoring and controlling certain aspects of future developments.
It is worth noting that the larger economies like the US have been sluggish in their adoption when compared to smaller nations.
At this year’s UN-organised Blockchain for Impact Summit, held on the 4th of June this year, a good dose of positive attention was given to smaller nations and their haste in regards to adapting to and positioning themselves to leverage the potential benefits of Blockchain and cryptocurrency.
According to the relayed observations of the Sovereign Governments Fund’s (SOV.global) founder, Barak Ben-Ezer, smaller nations have an advantage of being able to pass laws quickly in comparison to large “slow-moving bureaucracies”.
When considering the notoriously quick manner in which this sector has developed, small haven states may find themselves in the best position to service the growing industry. The nascent state of Liberland is no exception in this regard.
“No law shall abridge the right to issue and/or use any commodity or item as currency or provide any incentive in that respect unless any party to the transaction is legally prohibited from possessing such commodity or item;” as per the constitution of Liberland.
One could postulate on how, in a state that promotes tokenization, there may be very little to no need for boys club stock exchanges like the ones seen on Wall Street.
For funding infrastructure development, Liberland need not revert to issuing bonds like larger governments, or applying for grants and loans. Instead, Liberland could go the route of the ICO (or ETO or STO for that matter).* Not only is this a quicker option, but it also opens up any future projects to more global investment.
This unprecedented level of financial freedom, coupled with the global nature of cryptocurrencies, could offer a potential investor a plethora of options in the way of cross-border trade with the small state.
With that in mind, one could speculatively assume that with a system so open to cryptocurrency, it is only natural that the underlying technology would be a priority on the developmental and educational fronts. Monaco does not, by any means, have to be the only “digital knowledge hub”, as it aims to become.
The chain-linked building blocks of cryptocurrency have shown themselves to have many beneficial uses. For how decentralized Blockchains can be, they do a better job at organizing and storing vital information.
A simple use case example would be the storage of identity-related information on the Blockchain. This could then be easily linked to medical information, creating a scenario where any Liberlandian in need of very specific medical attention may be identified by simply scanning a QR code.
Vinny Lingham, CEO of Blockchain secured identity platform called Civic, made mention of mobile device stored digital ID’s streamlining the delivery of aid where needed.
The use of DLT (Distribution Ledger Technology) may also prove invaluable in the area of public procurement. By definition, this is the procurement of services, works or supplies, by a government-run entity, from public entities, by formal contract or otherwise.
Due to the transparency of DLT, smaller nations can benefit from the streamlining of processes related to public procurement. With relevant data clearly logged and made available to all involved parties, the threat of unfair business practices may be mitigated to some degree.
The promised benefits of Blockchain are in most cases still being tested, in a world that is constantly changing. However, if the cryptocurrencies are anything to go by, this new industry is one that handsomely rewards those who have an appetite for risk.
*Editor’s note: Liberland’s currency, LLM, is under active development.