With the development of the 4th industrial revolution and its
implementation, enormous changes are taking place at all levels of
the systems. Technology is subject to change and renewal, and the
day is not far off when paper money will be replaced by digital
money.
The key element of the traditional economy that the anonymous
creator of Bitcoin wanted to fix was money. In the modern world,
national currencies, or fiat money, are printed by governments.
They are also a centralized structure with known flaws. First of
all, the value of money is determined by the actions and
credibility of the issuer. In addition, fiat money is subject to
constant inflation, i.e. depreciation.
Bitcoin is a decentralized system that operates on a software
protocol and is based on the principle of direct exchange between
users. It works without the involvement of any regulatory body or
central bank, issuing coins and processing transactions is done
collectively by the participants of the network. Thus, no one can
control Bitcoin, block or cancel a transaction. However, anyone can
join the network, use it for transfers, or develop Bitcoin
code.
After a meteoric rise on October 12 from $26,750 to $34,667 on
October 31, the price of bitcoin (BTC) has not stopped moving
upwards. On the day Grayscale Investments met with the SEC about a
bitcoin-ETF application, BTC rose from $36,500 to multi-day support
at $37,400.
Can Bitcoin ever replace paper money in
Azerbaijan?
Today, in the global re-farming of the world and implementation
of the 4th industrial revolution, technocrats, elites, and big
companies of the West, attach significance to the introduction and
creation of a centralised system of one Bank with a single currency
for all in digital form at the global, world level. The
introduction of digital currency has become very important after
the emergence of Bitcoin. Western countries are a great example of
how digital currency adoption will be handled in social and
industrial circles. The European Union and its countries have
already released a ready-made digitalisation system called
CBDC.
Bitcoin will not replace paper money in Azerbaijan, as its
transition marks a systemic reformation and consideration of the
needs and requirements of society and the state, but there is a
possibility that a digital currency like Bitcoin or CBDC will be
introduced soon.
According to Taleh Kazimov, Chairman of the Board of the
regulator, the Azerbaijani Central Bank has all the possibilities
to introduce digital manat. Its introduction is hampered by the
fact that the impact of digital currencies on financial stability
and monetary policy has not been fully researched. Azerbaijan is
studying by observing other countries with digital currencies.
“Of course, digital currency has certain risks that can affect
the economy, including requiring a large number of electronic
resources. It is encouraging that the Central Bank has all the
resources and opportunities to introduce the digital manat,
however, we are focused on modernizing and optimising the national
payment system, and then we will start introducing innovations”
Why bitcoin is not very recognisable in
Azerbaijan?
Informativeness, social prosperity, and self-education, their
importance in balancing will give knowledge to society in the use
of technological and social benefits, and it is also significant
for the state in preparing society for the transition to a common
system of digitalisation.
In Azerbaijan, more than 90 percent of money turnover is still
in cash. The use of payment bank cards in the country and its
issuance to date there are about 9.4 million cards. A significant
part of the population in the country uses cards for cashing in or
out. Although the turnover of online commerce has also increased
slightly during the pandemic, it remains very low overall.
Older and younger generations have a lack of understanding of
the issue, reducing their informativeness. A possible approach is
to educate and introduce it through tourism and immigration
policies. Technological breakthroughs, as important for the
realisation and implementation of a centralised digital currency
system. A base for storing, processing, and transmitting data and
its speed, are important attributes for the realisation of the task
at hand.
Can Bitcoin ever gain dominance over the world’s
currencies?
Leading up to the global events taking place in the world, great
importance is being placed on technological advances in
implementing the agenda of the new world government. The Middle
East war as the Russian-Ukrainian war continued to create problems
in the supply of commodity turnover. France’s withdrawal from
Africa left a trail of continuing waves of problems and reforms.
Africa was the first to introduce the digital currency CBDC.
It is now becoming increasingly clear that Bitcoin can be a
creation of individuals, and was launched as a ‘normalisation’
experiment to introduce the public to digital currency. Once this
stage is passed, the fiat currencies of the world will be destroyed
in a planned debt crash and then replaced by a government-approved
cryptocurrency with all transactions and digital wallets tracked by
the Western governments of the world.
Last year there was a collapse in cryptocurrency prices.
“Mass panic” causes a $1 trillion collapse in cryptocurrency
prices and a warning of a “short squeeze” after FTX’s FTT goes into
freefall, dragging Bitcoin, Ethereum, BNB, XRP, Solana, Cardano and
Dogecoin with it. Bitcoin, Ethereum, and other major
cryptocurrencies fell sharply this week, taking billions of dollars
out of the entire cryptocurrency market and pushing it below the
long-awaited $1 trillion mark.”
During a recent European Parliament hearing, Christine Lagarde,
president of the European Central Bank, said that the digital euro
would not have the anonymity of cash, and then dismissed concerns
that the government would use the digital euro to control what
people can buy as a “conspiracy theory.”
Lagarde has previously acknowledged that privacy is one of the
main reasons for Europeans’ concerns about the proposed European
Union digital currency (CBDC), the digital euro. Despite this
admission, she continues to insist that there will be no anonymity
for users of digital euros and that they will never become as
private as cash.
“Privacy is protected,” Lagarde said. “Not anonymity, but
privacy. And we can address all the conspiracy theories that exist
about this as if Big Brother is going to determine what you buy
when you buy it, and how it should be restricted.”
Nigeria, with a population of over two hundred million people,
has become the first serious global test bed for the introduction
of central bank digital currencies (CBDC).
On October 25, 2022, a year after a nationwide referendum on the
creation of CBDC in Nigeria in which 99.5% of citizens voted
against the digitalisation of the currency, then President
Muhammadu Buhari issued a decree that despite opposition from the
majority of the nation, the financial revolution would happen
anyway.
In December 2022, the Abuja government launched an all-out
attack on cash. On 10 February 2023, about 80% of the $7.2 billion
previously in private hands was in CBDC digital accounts, the
poorer part of the population (more than half of the people) still
had no bank accounts. Half the country was left with old, worthless
banknotes.
On 16 February 2023, violent riots broke out in the country,
resulting in casualties. Stripped of all their wealth, desperate
and hungry people took to the streets demanding the restoration of
paper money.
By the end of January 2023, transactions using the eNaira
digital currency were running smoothly but were limited to the
middle class – only about thirty-five to forty million people.
The problem was that the new money was nowhere to be found. Even
today, when the central bank withdrew from the experiment, the
supply of new cash did not even reach ten percent of Nigeria’s
total money supply.
Nigerians could not understand how the government planned to
eliminate existing cash and issue new money just weeks before the
general elections slated for 24 February 2023.
The situation of uncertainty and danger persisted for three and
a half months until the inauguration of the new president, Bola
Ahmed Tinubu, the former civilian governor of Lagos State. On 29
May 2023, about 108 days after the virtual elimination of cash,
Tinubu reinstated the old currency, as well as the new eNaira and
electronic eNaira.
What made him take this step? Was it influenced by the
experiment’s overseers from the IMF, the US Fed, or the WEF?
Today the specialists of the Central Bank of Azerbaijan monitor
the key trends in this sphere and study the best practices of
leading international organisations and other countries, in
particular, they actively cooperate with the Central Bank of
Turkiye for further implementation of the most optimal mechanisms
in Azerbaijan.
—
Abbas Ganbay is AzerNews’ staff journalist, follow him on
Twitter: @Noend33
Follow us on Twitter @AzerNewsAz
