Can Azerbaijan benefit from introduction of cryptocurrency?

Business Materials 26 August 2017 16:28 (UTC +04:00)

Baku, Azerbaijan, Aug. 26

By Azad Hasanli – Trend:

Recently, the popularity of cryptocurrencies, the most famous of which is bitcoin, is growing rapidly. They are increasingly being introduced into everyday life, and some countries like Sweden and Japan have allowed the use bitcoins and other cryptocurrencies as a means of payment. But what benefits can cryptocurrencies give to countries like Azerbaijan?

According to economist Farhad Amirbayov, cryptocurrencies can become new accounting units for clearing settlements in international trade.

“Those countries that will be able to develop high-quality legislation for working with cryptocurrencies can be leaders in this area. Strong volatility of cryptocurrency rate can be reduced, for example, by tying the rate to a tangible asset,” the expert told Trend.

The main advantage of cryptocurrencies is their decentralization – they aren’t issued by central banks, and they compete with conventional money and traditional financial industry. Under conditions, when countries – issuers of reserve currencies are burdened with huge debts, and the prospects for further growth of globalization are in question, once the uniform financial architecture can disintegrate into several currency areas. Perhaps, cryptocurrencies will to some extent allow supporting global trade in the conditions of fragmentation of financial markets.

Meanwhile, the expert thinks that at the current stage, cryptocurrency should be considered as a currency of full value.

“Crypto currency can become a clearing currency and function as a unit for accounting the movement of international trade, goods and services,” he added.

Active use of cryptocurrency makes important the issue of increasing cybersecurity. However, as Amirbayov noted, this is a completely solvable task.

“It is also worth remembering that the cryptocurrency, in particular bitcoin, operates on the basis of the blockchain system, and it is almost impossible to hack this system,” added the expert.