A national currency is a sovereign medium of exchange issued by a country’s central bank or other monetary policy made in a state. The primary use of currencies is paying for goods and services. The British pound and the United States dollar are this era’s most robust currencies.
For instance, the British pound is the oldest national currency globally. It’s been in use for over 1200 years, surviving numerous changes and financial crises. The pound is the topmost strong currency of our time. Similarly, the United States Dollar has been in use since 1972, surviving many problems clouding currencies, including inflation and volatility.
Inflation is the year-round biggest threat to any fiat currency. Even the unshakable coins globally have inflationary prospects. In August 2020, the US dollar’s inflation rate hit 1.3%, while the British pound had an inflation rate of 3.05%. Unstable currencies, including the Venezuelan and Zimbabwean currency, saw surging inflation rates striking over 1 million percent. But what drives inflation? There are three main known reasons for currency inflation;
- Demand-pull inflation- It arises when product demand surges and surpasses a product or service’s general supply. The upsurge in unfulfilled demand quickly swirls the prices, thus demand-pull inflation.
- Cost-push inflation- This arises when general production costs, like wages and materials, increase. To make profits, companies ultimately increase the prevailing prices of the new product.
- Expansionary fiscal policy- Fiscal policies set up by the government like tax cuts or lowering interest rates impact currency values. For instance, if a government cuts taxes, the long term result is a higher demand for products due to affordability. Similarly, a reduction in interest rates may have a long term effect of increasing demand, rising prices. Any rise in demand affects currency stability.
Non-fiat assets, i.e., crypto assets, face severe volatility issues. Since its inception, bitcoin has been the most volatile asset in cryptography. Between 2017 October and January 2018, its volatility rate nearly hit 8%. Crypto assets are, therefore, not reliable investment currencies owing to their volatility.
Mitigating Inflation and Volatility
A new blockchain-based government, the United Allied States, merges the most stable, reliable investment and medium of exchanges. It tasks the finance department in overseeing financial matters, its core function being instituting a digital sovereign currency. This government will have a stablecoin, which gets high credits due to its stability. The stability is owing to the asset backing its value, gold.
Gold has remained highly valuable for several millennia, thus leveraged as a store for value and medium of exchange. The worthiness is owing to its surging prices over time driven by the market forces of demand and supply. Gold’s demand perpetually rises to a level where the annual gold production cannot wholly fulfill the existing need. The scarce supply leads to the increase in prices of the gold assets in circulation.
Leveraging gold’s capabilities makes the UAS national currency a towering medium of exchange. Due to the perpetual gold value increase, the UAS national currency will increase in value, thus remaining deflationary.
Moreover, the volatility threats in digital currencies don’t affect the UAS national currency. Gold is immune to volatility, meaning its prices do not plummet beyond the set minimum prices. Thus backing the UAS national currency with gold offers citizens security and stability of the coin.
The Backing Technology
Apollo fintech leverages Apollo blockchain capabilities in bolstering the UAS currency stability. Apollo blockchain is the most advanced, futuristic blockchain in the crypto world.
Apollo blockchain merges quantum-safe functions in preparation for the soon global evolution to quantum computing. Quantum computers receive reverence because of their high computing capacity and power efficiency. Therefore, these computers will dominate in hosting government systems; however, the current government systems won’t fit quantum computing since they aren’t quantum enabled. However, the UAS system will survive after the migration.
The adaptive forging algorithm helps in solving blockchains scalability issues by stopping the non-stop block creation. Block creation occurs on a need basis when a transaction is underway. That ensures there are enough resources to complete every transaction.
Database Level Sharding
Apollo blockchain introduces a unique functionality, database level sharding. This algorithm ensures that the database is partitioned into small independent shards. The shards are independent in that they can be operated from different computers, thus more speed and resources for transaction completion.
The IP masking algorithm parallels the Zk SNARKs algorithm in the protection of user data. The IP address of the computer used by persons transacting in the Apollo blockchain is entirely out of reach. That will allow UAS citizens to complete transactions safer without fears of traceability.
The United Allied States, a new blockchain-based government, will be the solution to nationalism problems clouding the current governments. However, the government gives more financial reliability to its citizens by providing a stable digital sovereign currency. The currency’s stability is owing to the backing asset, gold. The deflationary nature of gold makes it the best investment to back UAS new national currency.
Additionally, the backing technology makes UAS government systems and currencies the most reliable. Zero transaction downtimes, fast and secure completion of transactions are the attributes of UAS new digital currency. The currency will solve all problems clouding the current medium of exchanges and investment assets. It’s the ultimate deflationary and non-volatile sovereign currency.