It’s been a painstakingly agonizing year for the Crypto bulls – Ask anyone who had invested in the decentralized digital currencies at the beginning of the year or late last year when the cryptocurrencies were peaking only to see their investments take a nosedive throughout the year. Having said that though the general Crypto adoption & institutional support and investment has seen a contradictory upswing. There are still regulatory issues that need to be sorted out but everybody agrees unanimously that the innovative spirit the whole Blockchain/Crypto movement has sparked should not be curtailed with proper safeguards for the general investor.
While the Central banks in many jurisdictions have been toying with the idea of CBDC’s (Central Bank Digital Currencies), it seems we are still a few years away from seeing a central bank issued digital currency (with the exception of Venezuela’s Petro), other projects like stable coins & locally issued digital currencies are gaining traction. In a bold move, Canadian city of Calgary in the Province of Alberta has recently launched its own ‘Calgary Digital Dollar.’ Alberta presents itself as a Crypto friendly province with its lax laws towards the digital assets & also houses a Crypto mining facility in Drumheller by Toronto’s Hut Eight proclaiming itself to be Canada’s largest miner. Calgary digital dollar will not replace the Canadian dollar, rather, will be used in conjunction with the Fiat currency.
The new local digital currency has full support of the provincial government which intends to achieve growth of local economy via integration & incentivization. Alberta’s Finance Minister, Joe Ceci, officially launched the Crypto by paying for a cup of coffee, thus demonstrating successfully that digital currencies can be used for everyday transactions. This is what he had to say on the occasion:
“I don’t mind seeing things happen locally and people making money. It’s a lot of fun to meet people and barter and exchange. [The Alberta government] supports the work of Calgary Dollars in every way.”
The new digital currency is a successor to the “Calgary Dollar“ which has been in existence since 1996 and being used alongside the Federally controlled Canadian Dollar to create a value chain for the local economy that stays within the domestic ecosystem. The re-branded digital version of the of the original local currency works via a smartphone App which is available for both iPhones & Android devices. The App lists shops, restaurants & all business outlets where you are able to transact with your Calgary digital dollars.
Local businesses can accept up to 100% of the payments for goods & services in the digital currency with an obligation to accept at least 10%. To encourage & expand the usage of the digital currency, businesses can also pay 50% of their business license fees with CDD. The Calgary residents can make use of the following benefits:
- Ease & Convenience of using the mobile App for all payments at eligible vendors apart from making donations to local charities & using it to buy intra-city transport tickets.
- Posting Ads for buying/selling stuff on the CDD website earns you digital dollars which gets credited your account, so rather than paying for an ad you earn money to do so!
- Recommending the use of the App to your family/friends or taking surveys makes you eligible to earn Calgary Digital Dollars as well.
- The only drawback at this point is that you can’t buy in or cash out CDD as the mainstream Cryptocurrencies like Bitcoin to encourage re-usability of the digital asset & development of the local economy.
Calgary is not the first or the only city to experiment with digital currency. Other cities have been working on pilot projects for locally developed digital currencies for varying uses.
Dubai (UAE) – The Arab Emirate has been aiming for a to become the World’s First blockchain powered government by 2020 & development of EmCash, local digital currency is part of this ambitious project being undertaken by a local company emcredit, in collaboration with Dubai Department of Economic Development. The digital currency once functional will be used by the local citizens to pay for bills, good & services. The scope of the digital currency is pretty widespread.
Berkley, California (USA) – This western U.S community initiative was given the green light in February of this year with the goal of raising money for community assistance projects. The Project plans to initiate a “Initial Community Offering” similar to ICO (Initial Coin Offering). Instead of selling the municipal bonds to underwriters who sell to brokers & institutions at inflated prices, city would sell micro-bonds (splitting municipal bonds) in smaller denomination of digital tokens directly to its citizens, leaving the middlemen out & making it cheaper & convenient for the buyers.
Orania (South Africa) – A small community of 1600 in South Africa has been testing the use of a digital currency called E-Ora, issued by the local Chamber of Commerce. The local cryptocurrency has been used by the community residents since July of this year, who have reported a decrease in transaction fees & ease of use as the major benefits of the pilot project.
Others – Countries like Sweden, Iran, Russia & Thailand are actively exploring the issuance of national cryptocurrencies most of whom are in Proposal & development stages.
Whenever a city launches or is planning launch a digital currency it is either going to be backed by some asset or by a financial authority. All of the above projects are not decentralized in nature but there are certainly opening up efficient avenues of inclusion for the citizens to spend & invest locally. These local digital currencies are not here to disrupt the current fiat based system but to complement it, thus moving to a more sustainable ecosystem for the smarter cities of tomorrow. The transition to a digital economy is well underway…