I believe that New Zealand is in a unique position to create its own Digital Reserve Currency.
This currency would be scalable to adopt the concepts of the Bancor as proposed by JM Keynes.
Throughout history various currencies have existed as the major reserve currency from Portuguese real, Spanish pieces of eight, Dutch gilder, French franc, British pound sterling. And now the US dollar.
All these past currencies have failed due to what has been named the Triffin dilemma, where balancing the external needs of a reserve currency and the internal requirements of their own economy become contradictory.
This can be seen in the USA today whereby the US is effectively issuing close to a trillion dollars pa to solve their domestic economy's woes.
Interestingly the next country that would be expected to have a global reserve currency being China, has expressed reluctance at their role in such a position, however has recently began currency exchange agreements with Russia, to alleviate their position. The other nations in the BRICS group appear to be doing similar.
Generally reserve currency attributes needed for a reserve currency are. 1.)
Liquidity (easily traded)
Size (enough of the currency exists)
Safe Haven (swiss franc is a good example).
I am suggesting that New Zealand create a second currency based on these principles.
1.) Utilizing the Bitcoin protocols however more scalable. (No mathematical limit).
2.) Wallets available in various forms eg; primary wallets: nationally physically verified and authenticated. secondary wallets: globally pseudonymous.
3.) The price fixed by national calculation. Eg NZ$ factor + "price of energy gram" factor. [37.18% powerunit is a reasonable initial factor]
4.) To gain legitimacy the energy factor would be via physically holding said energy, although this will decrease the seigniorage of the mints production.
5.) Decentralized in that other nations may have digital mints, if they so wish after entering an exchange agreement.
6.) Currency issued may be redeemed by way of a 90 day Bill from the country of issue in its own currency.
An international agency similar to the IMF's functions would need to be formed to control agreements, and digital check-pointing.
Also the POW(proof of work concept of bitcoin is not used for issuing currency).
Note: a single node somewhere on the planet is still doing the bitcoin check-pointing.
This concept is not to, replace fiat currency, legal tender, or other digital currencies.
If we do not act at some stage on changing our reserve currency we face the prospect of holding a mountain of useless reserve currency in the future as the US economy erodes. Luckily I expect most other nations will be joining us on this ride. However the future transition to the next reserve currency will be very expensive.
If New Zealand was to be the first mover on such a new currency there will also be many advantages and opportunities for New Zealand businesses. How ever time is precious and the longer New Zealand holds the US dollar the more time we are giving the US an effective interest free loan.
A starting point for New Zealand to commence circulating the currency could easily be in the 680 million foreign aid we give annually.
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