By Amina Nazarli
Azerbaijan should begin to implement a pilot project on introduction of cryptocurrency, believes Sabit Fatizade.
Head of the Ganja branch of the International Bank of Azerbaijan (IBA) noted that sooner or later the digitalization process will defeat cash.
“At the time, paper and metal money replaced the barter system [exchange of goods], now we are at the stage of development of non-cash settlements, then the turn will come to electronic money. For example, Japanese banks have already begun to implement the cryptocurrency, and cryptobanks are being created in Europe,” he said.
Cryptocurrency is a digital asset designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of additional units of the currency.
The expanded use of the Internet all around the world has paved the way for the circulation of virtual currencies. The expansion of e-business in the global economy has led to the creation of a specific demand in cryptocurrency.
As for the reliability and security of the digital currency, Fatizade noted that there is already a fairly reliable system of protection from cyberattacks in the world.
“The government has all the necessary means to ensure reliable control and a high level of security of the crypto currency. Of course, the introduction of any new technology at the initial stage can create certain problems. But this does not mean that we should be afraid of this and should not keep up with the new demands of the globalizing world.
I believe that Azerbaijan, having become a locomotive in this sphere among the CIS countries, can introduce for example, AzCoin. In other countries, of course, there will be electronic money corresponding to the names of countries, for example, in Russia - RusCoin, in Georgia - GeoCoin and so on,” he said.
Today there are hundreds of other cryptocurrencies, often referred to as Altcoins. Even though a lot of people seem to think Bitcoin was the first cryptocurrency of its kind, this is not entirely true. Bitcoin is by far the most successful project in the modern era, but the concept of decentralized digital money was not an invention by Satoshi Nakamoto.
Real digital currencies have been around for some time. One of the first was E-gold, founded in 1996 and backed by gold. Another known digital currency exchange was the Liberty Reserve, founded in 2006; it let users convert dollars or euros to Liberty Reserve Dollars or Euros, and exchange them freely with one another at a 1 percent fee.