CoinAsia- THE ASIAN CRYPTOCURRENCY

                A Cryptocurrency is a medium of Exchange using Cryptographic Methods to secure transactions and control creation of new units. [Andy Green Berg (20^th Apr, 2011) – Forbes.com]

                Cryptocurrencies belong to a class of currencies called an alternative currency- where a different mode of Exchange is used in lieu of a Currency System. Cryptocurrencies are also called as digital currencies. Cryptocurrencies like Bit Coin have recently made News. That is because there are several issues related to cryptocurrencies.

                To keep things short and simple, it will suffice to say that cryptocurrencies should have following features.

1.A large and reliable computing power.

2.Peer based valuation of the rate/price of cryptocurrency.

                Many Asian Nations are infotech giants in their own right. Between them they have a large enough computing power, as several super computers in the TOP 500 supercomputers Globally are Asian.

                As for peer based valuation,the Asian Central Banks can provide sovereign based guarantee to the value of CoinAsia- The Asian Cryptocurrency.

Why Does Asia need CoinAsia?

                There are certain inherent advantages of Cryptocurrencies.

1.Minimal Transaction Cost:

                                Whenever you do a transaction with your credit card or any kind of Banking, a small Amount is deducted from your account as service charges. With Cryptocurrencies such costs are minimal and in many cases it is free.

2.It is very fast

                When you pay cheque to any bank, your Money is held by the bank from a few hours to many days. In the same way, international fund transfers take a long time. This is because the banks have to verify that the Money is really available for transaction to occur. With Cryptocurrencies this is done a lot faster.

3.Minimal chance for Fraud:

                A person who has paid with CoinAsia cannot snatch the money back without the recipient’s consent. Because of this, it becomes difficult to commit fraud that we see in the banking system today.

Asian countries must come together and float a Cryptocurrency called CoinAsia. They can allocate a fixed computing power for Cryptocurrency mining and regulate its value in the market. If done, this will be the first time that Governments will own and regulate Cryptocurrencies. This will also discourage unscrupulous elements who have so far been misusing Cryptocurrencies like Bit Coin.

4.It is Non-Inflationary:

                Cryptocurrencies usually have a fixed maximum number of units limited by computing power. That means that beyond that particular number, the Cryptocurrency cannot grow. [The maximum possible number for Bit Coin is 21 million]. Hence there will be no inflation. [Inflation is simply – “more money chasing fewer Goods”. But here, CoinAsia supply will be fixed. Thus, no inflation]

5.By introducing Governments into the Cryptocurrency equation, we can discourage Criminal elements from abusing Cryptocurrencies to commit Crimes and Frauds. Government Banks, and moreover multiple Governments will be regulating CoinAsia. There will thus be sovereign backing to the Cryptocurrency.

6.CoinAsia as a Precursor to a unified Asian Currency:

                                As of now, it is not possible for Asia (as a whole) to have a unified Asian Currency. The reason is that there are several barriers (Economic & Political) between the various Asian nations. It will take some time till these gaps are bridged. Until then the people of Asia can transact with CoinAsia. In the real world Asia has many paper- currencies. But in the Cyber world Asians can transact with one currency that will unite all Asia–CoinAsia. Say, over a period of Ten years, the barriers will come down and the path is paved for a unified Asian currency like the Euro.

7.Asian Governments can transact using CoinAsia. This will eliminate the need to transact with the Dollar. There are several benefits in such kind of transactions.

a.Trading countries need not have Dollar Reserves. 
Since CoinAsia will be pegged to their local currency, all they need to have is enough liquidity in their own currency.

b.There will be minimal or no Balance of Payment (BOP) crisis. 
This is because the use of Dollar as reserve currency is bypassed.

c.Swap agreements become easier and less costly. Say for instance, Mauritius (Asian Nation) wants to trade with South Africa (African Nation) but does not have enough dollars. All that Mauritius gas to do is sell its existing CoinAsia reserves to (say) Malaysia (Asian Country) and obtain Dollars (at a fixed Exchange rate). Thus, there is hardly any need to keep a running Dollar Account.

8.The Rest of the world can trade with the whole of Asia in only one currency (CoinAsia).
If Peru wants to trade with Nepal (Asian Country) all it has to do is buy CoinAsia with its local currency and pay Nepal in CoinAsia units. Not only that, Peru can buy similar goods at a different price from say Bhutan or Bangladesh. Here the trade is not dependent on Dollar or Euro or other hard currencies (which have their own problems associated with their Exchange).

9.Every day, hundreds of millions of Dollars are paid across Asia as transaction costs. By using CoinAsia at least a fraction of that cost is eliminated. That translates into Millions of Dollars left in the hands of consumers. This will lead to increased saving, increased investment and hence growth of economy in Asian countries.

10.The whole of Asia can have a single integrated commercial transaction system. This will lead to uniformity in Commercial and Accounting standards. This has immense impact on consumer satisfaction. As consumers will find shopping and business transactions to be seamless and Hassle free. A single CoinAsia card can be used to shop all across Asia. This will also allow better fiscal intercourse between Asian Nations as any deficit can be offset by CoinAsia loans which can then be traded for Dollars, other hard currencies or the local currency itself.

                As discussed, there are several benefits of CoinAsia – The Asian Cryptocurrency. Now is the time that Asia must seize and create CoinAsia that will have a tremendous positive impact on Asian Economies and the people of Asia as a whole.

                                  
                                     -Dr.Kartik Hegadekatti.
 
Dr.Kartik Hegadekatti is an Indian Civil Service officer.He is the Joint Secretary of CDMT,Govt. of India and presently serving in the Ministry of Railways.Views Expressed are Personal.