Disclaimer: As of Nov. 12, Tunisia’s central bank has denied reports that it is developing a digital currency. Please read the below article below with appropriate skepticism
Tunisia’s Central Bank Digital Currency (CBDC) will be issued under the assistance of the Russian ICO startup Universa.
On Nov. 7 Russian news agency Tass reported that Tunisia will be one of the first countries to start moving its national currency into a blockchain platform.
E-Dinar Expected To Be Transparent While Being Cheaper To Issue
According to the announcement of Tunisia’s central bank, the digitization of the currency has been already started and the paper-backed central bank digital currency will be issued on the Universa Blockchain.
The ICO startup will receive a share of the percentage of all transactions that will be carried out with the “e-dinar” with the ledger being visible to the central bank.
The CEO and founder of Universa, Alexander Borodich, although do not agree that this type of currency can be considered a true kind of cryptocurrency.
The CBDC will completely be state-owned while being backed by paper money, the blockchain platform will help against counterfeiting while making the issuance cheaper and more transparent.
“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.”
Tunisia will actually not issue a new currency, though parts of its reserves will simply be moved to a blockchain platform. The citizens will be able to exchange their actual physical currency for the “e-dinar”.
Digital Currency Can Change How Private Banks Operate
Borodich says that the digital currency can revolutionize on how private banks operate. He adds that all the physical money will be issued by the central bank while private banks will only be responsible for providing quality services.
Meanwhile, a Bank of Korea official remarks that developed countries have very little need of CBDC while in developing countries especially with poor infrastructure, a CBDC might prove to be a useful tool for inclusion and lower costs associated with cash handling.
Source: TASS | Image: Trevor Snapp/Bloomberg