Tunisia ‘s central bank has announced that the digitization of the Tunisian dinar has officially started, and that the Tunisian central bank digital currency (CBDC) will be issued on the blockchain Universa. By this move, Tunisia will be the first country to start moving its national currency on a blockchain platform. News agency Tass reports that Russian startup ICO Universa will help the nation to issue and manage the digital currency, e-Dinar.
Here Is All You Need To Know
- Tunisia ‘s digital currency e-dinar will be more transparent and less expensive to issue.
- Universa will receive a percentage of all e-dinar transactions, while the ledger will be visible to the central bank of the country.
- However, according to Alexander Borodich, founder and CEO of Universa, this form of electronic money cannot be considered a true cryptocurrency.
- The CBDC, or e-dinar, will be state-owned and backed by paper money.
- However, the blockchain will not only protect the currency from counterfeiting, but will also make the issue more economical and transparent.
“Digital banknotes cannot be counterfeited – each banknote is protected by cryptography as its paper counterpart has its digital watermarks. Furthermore, the production of such a banknote is 100 times cheaper than the waste of ink, paper and electricity in the process of printing, ” Borodich said.
- Therefore, Tunisia will not issue a new currency. Instead, part of its reserves will simply be shifted to the platform and citizens will be able to exchange their physical money with electronic money.
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Digital currency will change the functioning of private banks
Borodich expects digital currency to change the way private banks operate.
- In the new arrangement, all physical money will remain at the central bank, while commercial banks will only provide services and will therefore compete on the quality of the services offered.
- This is not the first collaboration between the Tunisian government and Universa. As reported by Cointelegraph last year, the Tunisian Internet Agency signed a strategic partnership with the startup for hosting some services.
- Meanwhile, as reported by Cointelegraph earlier this week, the European Union is also considering issuing its digital currency.
- The e-dinar will be more transparent and less expensive to issue.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world