Iceland Backs Digitization of Money
Iceland’s national currency, the Icelandic krona (ISK), is set to become Europe’s first blockchain-powered digitally traded currency after the nation’s sole financial regulator gave the green light to ConsenSys-backed fintech startup Monerium.
Per the FSA’s official announcement, Monerium will now be able to provide fiat payment services throughout the European Economic Area (EEA) using the Ethereum blockchain. While the use of electronic money is not something particularly new to the European countries, its use over a distributed ledger certainly is.
Monerium will operate under Europe’s electronic money framework and look to extend its DLT-enabled e-money services across the EEA.
Jón Helgi Egilsson, the co-founder of Monerium and a former chairman of the Supervisory Board of the Central Bank of Iceland, said:
“For practical purposes, fiat will be the currency most people and institutions will want to use in the near- and medium-term. And if you are touching fiat in any way, you just have to comply with the relevant regulations.”
Per sources in the know, the startup is planning to launch a blockchain-powered fiat currency pegged to the Icelandic krona. The currency will encourage parties to make cross-border payments without having to incur the cost of a financial middleman.
Reportedly, the yet-to-be-launched ISK-pegged digital currency will initially be operable across the European Union (EU) and might be introduced to other countries across the world depending on their regulatory stance on such a medium of exchange.
In January 2019, blockchain technology firm ConsenSys participated in Monerium’s $2 million seed funding round. At the time, the tech firm’s co-founder, Andrew Keys said that investment in Monerium was congruent with their long-term vision for a “decentralized and self-sovereign future.”
Could CBDCs See the Daylight Soon?
The approval of an ISK-pegged digital currency could be a precursor to the more exciting things to come in global finance.
Central Bank Digital Currencies (CBDC) are often brought into the conversation when speaking of ways to leverage DLT in the global currency ecosystem.
Many believe that CBDCs bring the best of both worlds as they ensure the transparency and immutability of blockchain technology while also being under the direct control of the issuing country’s central bank.
BTCManager reported on May 30, 2019, how the Central Bank of Bahamas is mulling launching a CBDC to ensure financial inclusiveness of the unbanked in the island nation’s remote areas.