Current Global Issues
Fiat money is currencies whose values are not underpinned by physical assets such as gold or silver. It is backed by the government that issued it and is designated to be legal tender. For instance, the US dollar doesn’t have any real assets like gold, silver or other physical commodity backing its value.
The value of fiat currency is supported by the confidence the general public has in the central bank and the government of the issuing nation. If a country were to become bankrupt, its fiat currency would lose value significantly.
2008 financial crisis also made it evident that there is no global oversight of how money is being handled, or it’s been packaged for e.g. collateralized debt obligations (CDOs). To avoid any such crashes in the future and to safeguard everyone’s hard earned money, we need one global currency which can be tracked and a technology which can be integrated globally with the required governance, security, and privacy.
Billions of people globally remain unbanked
Participate in the global financial sector – whether it is to transfer money or manage one’s wealth – one must have access to bank account.
Global financial literacy remains low
For people to successfully use financial services and markets, they must have a good degree of financial literacy.
High Intermediary costs and slow transactions
The current transactions times are really high and really expensive to store or transfer money.
Low trust in financial institutions and governments
The trust in financial institutions and Governments have been continuously on a decline due to consistent financial issues.
Rising global inequality
Due to the centralized nature of the current system, global financial markets tend to be dominated by those who can influence the markets and the system.
Currency manipulation and financial censorship
In a centralized system, countries have the power to manipulate and devalue fiat currencies, and this can have a devastating effect on markets and lives of citizens.
The build-up of system risk
With financial power concentrated with just a select few institutions, such as central banks and “too big to fail” companies, it means that one abject failure can decimate an entire system.