Brazil, Russia, India, China & South Africa (BRICS) are teaming up to create their own reserve currency. And while “foreign governments wanting to liberate themselves from reliance on the U.S. dollar are anything but new…at least based on the economics, a BRICS-issued currency’s prospects for success are new.”
I wonder if an alternative to the US dominated financial system, albeit via governments, will be helpful, ultimately, for mass adoption of a BTC based financial system.
Creating a new fiat shitcoin instead of using global, neutral, permissionless BTC? ngmi
Regarding if it’s good for Sovryn or BTC, idk, depending on how this affects demand for USD it could cause high inflation of USD which may lead some more people to seek BTC as a safe haven. This would also result in high (price) inflation in DLLR which might result in reduced demand for holding DLLR, unless DLLR moves away from the USD peg to another peg. Overall it’s hard for me to say if all of the direct and higher-order effects results in net-positives or net-negatives for BTC or Sovryn.
Local currencies are still needed, and a BRZ pair on Sovryn would be an start, and similar ones for other countries once such currencies are identified.
A sovereign financial system cannot be based on dollar only, but the argument to a BTC based platform such as sovryn and its products facilitating local currencies would be a great good start.
There’s a reason for this. The dollar is the world reserve currency. Basically the only reason people hold a local currency is because they either have no access to dollars or are legally required to use the local currency. If they have access to a stablecoin, they now have access to a dollar equivalent, and they have a way around legal requirements. That is, all the reasons for using a local currency are removed. In that case, the market has shown that they choose a dollar stablecoin 98.9% of the time. So it’s probably a waste of time to create a stablecoin in any other currency.
The only reason I think people might want local currency stablecoins are to borrow them. If you live in Argentina you don’t want your liabilities to be measured in USD since your income will always be dropping against it. This would make any loan you take harder and harder to repay (if you are paying interest on the loan, they would get bigger and bigger every day considering inflation over there is now higher than 100% per year).
You would prefer to lock BTC and borrow a Peso pegged Stablecoin that you can use for daily activities.
This is what MoC’s new venture “Flipago” is set on doing, and there is a market for them, I just don’t know how big it is. Sovryn doesn’t need to create them, but simply adopt them once someone else creates them (like the ex Money on Chain Team now called “Mim Labs”).
The Money on Chain team has now created a separate entity called Mim Labs to operate in an effort to further decentralize their protocol. So officially, there is no longer a “Money on Chain team” now is Money on Chain the protocol, free, open and owned by the MoC holders, and Mim Labs.
When they did this they passed a proposal to have a % of the fees from MoC directed to Mim Labs in order to support MoC and start other ventures like Flipago. It’s a very interesting move by them.
If the MoC holders think the Mim Labs is not doing a good job, they could revoke this fee sharing. Also, a new team could form if they think they can do a better job, present a proposal and convince enough MoC holders to choose them over Mim Labs. I don’t think this can happen from a practical viewpoint. But it is theoretically possible. Money on Chain is a much simpler protocol (which is it’s beauty) so I think is much easier to do this there, than to replicate it in Sovryn (although at some stage might be necessary).