The PAYTECH Book

The Case for a National Cryptocurrency

By Dmitro Nikolaievskyi

Lawyer, Ukrainian National Bar Association

The preservation of a sensible balance between the needs of nation state sovereignties on the one hand, and the blurring of borders for such exchange on the other hand, lies in the implementation of national cryptocurrencies, created by the state, which are not new money, but a new, more effective form of old money. In its most simplified form, we could refer to national cryptocurrencies as tokenized national currencies.

When we talk about national cryptocurrency, its technological implementation is based on the use of cryptographic algorithms, which will provide for stable and safe functioning of the whole of its chain as an independent payment system. This mechanism offers protection from inflation risk, as it will not allow a state currency unit to circulate both in normal and in tokenized form at the same time. For its implementation, the introduction of a national cryptocurrency unit will automatically require the elimination of an equivalent unit of the normal currency.

A national cryptocurrency could be introduced and distributed through a newly created special state authority – a national cryptocurrency exchange. The first and foremost function of this state authority will be to provide regulative, methodological and technical support for the national cryptocurrency system to function. It would also be logical to assume the requirement for a platform for trading ...