At a time when blockchain and cryptocurrency waves are sweeping across the world and the vague prospects of central banks on cryptocurrencies, many large cities worldwide seem to rush to introduce their own regional cryptocurrencies.
In Asia, Japan, South Korea, Chinese Taiwan; In Europe, Britain, Norway, Sweden, Ukraine; In America, Canada; In Africa, Orania … According to public statistics, more than 14 countries and regions in the world have launched exclusive “city cryptocurrency”.
EastShore will make a detailed introduction of the city cryptocurrency in this article. No matter whether they are successful ones, they will provide a new paradigm template for the development of blockchain and cryptocurrency.
Oil Coin (Petro) in Venezuela
As the international financial environment tightens and the global debt burden intensifies, in February 2018, Venezuela in South America, launched a cryptocurrency called Petro, to save the collapsing domestic economy.
According to the original plan, “oil coin” was linked to the 5 billion barrels of oil in Venezuela; in the new white paper issued by Venezuelan government, “oil coin” has now been changed to the one anchored 50% to oil, 20% to gold, 20% to iron and 10% to diamonds.
The white paper says that oil coin will serve as an exchange medium for investment tools, savings mechanisms and public services, which can be directly exchanged with domestic goods. According to recent news reports, there are many applications for oil coin, which have covered a lot of fields such as home purchase, exit and entry, pension and welfare. According to the latest news, Venezuelan President, Nicolas Maduro, issued a message on Twitter on July 4 to order the Central Bank of Venezuela and all its branches, to accept the cryptocurrency Petro (PTR).
However, the development of oil coin is not satisfactory. Firstly, in the application of the oil coin, the United States once served as a powerful force to stop the advancement of the project. Secondly, the Venezuelan people would rather store bitcoin than accept the cryptocurrency introduced by the government whose reputation had fallen to the bottom.
- Official site: https://www.petro.com/
- Whitepaper: https://www.petro.gob.ve/files/petro-whitepaper.pdf
E-Krona in Sweden
Sweden, a country located in northern Europe, has taken an important step in the field of cryptocurrency.
To better build the digital society, the Swedish central bank announced that it would launch the national cryptocurrency E-Krona, which would be mainly used for small transactions among consumers, businesses and government agencies. Now, the project is in its initial stage and is expected to be completed and put into service in 2019.
According to the E-Krona project report, the cash flow rate continued to decline in Sweden. In 2018, only 13% of the people used cash for transactions; more and more consumers turned to electronic payments. The issue of “cash marginalization” will make it more difficult for the Swedish central bank to promote a safe and efficient payment system; however, the cryptocurrency system will provide better solution for this problem.
In addition, during the interview by the New York Times, Mr. MatsDillén, Chairman of the Swedish Parliamentary Committee, said that the disappearance of cash flow in the society would inevitably have a major impact on the economy, and the country must be prepared for the problems arising in the future.
- Official site: https://www.riksbank.se/en-gb/payments–cash/e-krona/
- Whitepaper: https://www.riksbank.se/globalassets/media/rapporter/e-krona/2017/handlingsplan_ekrona_171221_eng.pdf
E-hryvnia in Ukraine
Like Sweden, the Ukrainian government also hopes to solve the industrial pain points resulting from cash by issuing the cryptocurrency. On February 22, 2019, the Central Bank of Ukraine completed the pilot program for the national cryptocurrency E-hryvnia starting in December 2018.
It is reported that this cryptocurrency will be managed by the Ukrainian government to ensure lower payment costs and increase the volume of non-cash payments in Ukraine. According to the officials in National Bank of Ukraine, e-hryvnia must be linked to the legal currency at a 1:1 ratio so as to prevent inflations.
Some people believe that the cryptocurrency endorsed by the central bank will increase the volume of non-cash payments in Ukraine and reduce the cost of payment.
However, the blockchain-based e-hryvnia is still in the planning stage. They said that they could completely decide whether to introduce “e-hryvnia” only after a detailed analysis had been made.
CITY coin in Norway
On February 12, 2019, the private anarchic capitalist city, Liberstad, in Norway announced the establishment of a smart city platform with local cryptocurrency as the official trading medium. Liberstad named it “CITY.”
It is reported that CITY is the original cryptocurrency of its blockchain-driven smart city platform, on which the residents in Liberstad can use CITY to pay from shopping to registered property as well as contract and insurance, even an egg and a loaf of bread.
In addition, the CITY and the blockchain smart city platform in Liberstad, the “city chain”, are interoperable, that is to say, the platform allows urban residents and entrepreneurs to establish and provide services “on a private, internal and voluntary basis” to replace the public terms of government operations.
- Official site: https://www.liberstad.com/about-city-coin.html
REC (Real Economy Currency) in Barcelona
In May 2018, the City Government in Barcelona launched the local cryptocurrency REC, the Real Economy Currency. With equal values to EURO, REC token is the cryptocurrency based on blockchain technology; residents can use mobile phones to directly pay RECs to retailers to strengthen local economic development, promote consumption and improve the living standards of local residents.
- Official site: https://rec.barcelona/en/home/
Sovereign in the Marshall Islands
The Republic of the Marshall Islands in Oceania also announced its own cryptocurrency plan.
The Republic of the Marshall Islands intended to issue Sovereign tokens (SOV) to supplement the US dollar as its legal currency. The SOV can be used as the legal currency for companies and consumers on the islands.
Currently, the maximum number of SOV tokens tentatively issued is 24 million, which is allowed to be used as the legal currency. As part of the plan, the government will issue 2.4 million SOVs to residents of Marshall.
In the telephone interview, David Paul, the minister assistant to the President of the Republic of the Marshall Islands, said that the cryptocurrency known as “Sovereign” would be issued this year.
Calgary in Canada
In 2018, Canada launched a local cryptocurrency called Calgary led by Joe Ceci, the Finance Minister in Alberta. So, Calgary also became the first Canadian city to introduce local cryptocurrency.
The goal of Calgary is to promote local economic participation by means of incentives. Local companies will be allowed to pay for their products and services in the form of Calgary and they are obligated to accept at least 10% of the (new) currency.
Moreover, by means of the websites accepting Calgary, the local enterprises will be able to develop new potential customers. When citizens use the Calgary to pay for specific items in local economy, they will receive additional rewards in the form of the same currency, which they can then use to pay for transit tickets or grocery articles.
The finance minister said in an interview that the currency would not replace the legal currency, but it would be used together with the Canadian Dollar (CAD) to promote the local economic sector.
HullCoin in UK
As early as April 2014, the Kingston government on the River Hull in the UK proposed a plan to launch a cryptocurrency called HullCoin. The first local government to introduce cryptocurrency in the UK came into being since then.
But the residents can’t buy HullCoin with British pounds. The only way to get HullCoin is to ask someone else to transfer HullCoin to their wallets or complete “good deeds.”
The launch of HullCoin is to help the local residents with economic difficulties. After participating in volunteer activities, they will receive a certain amount of HullCoin, with which they can go to the local food bank for food.
In addition, the enterprises also accept HullCoin, which may attract more users to promote their business. On the other hand, users can share social behaviors related to the cryptocurrency distribution.
- Official site: https://www.hull-coin.org/
S-Coin, Siru and Nowon in Seoul, South Korea
In June 2018, Seoul, South Korea, tried to issue the cryptocurrency, S-Coin, under the situation that the national cryptocurrency was difficult to be implemented. S-Coin was controlled by the Seoul City Council, which meant that it was not a decentralized cryptocurrency. According to Seoul Mayor, Park Won-soon, the S-Coin could be used for multiple services in Seoul. It is reported that S-Coin would be used first to support public transportation expenses, a payment for the sake of environmental improvement.
In September of the same year, the Siheung City, a satellite in the suburbs of Seoul, issued a new cryptocurrency decree and the official token, Siru. The residents can use Siru to purchase goods or services and enjoy a 5% discount; the merchants can waive the card fees. The Siru project has contracts with 3,800 local companies, and the number of companies joining the project is about one-fifth that of small and private businesses in the city.
In addition to the Siheung City, Nowon, a city in the northern part of Seoul, also launched the Nowon token for the first time in February this year. This program allows residents to use Nowon to pay at a bookstore or to give gifts to neighbors. It’s reported that Siru can be used in local area to pay for goods or services. It’s also said that Nowon in the northern part of Seoul has allowed residents to pay with cryptocurrencies in bookstores, shopping malls and other places at the beginning of the year.
In addition, 65 cities in South Korea also plan to launch tokens.
Gimpo Pay in Gimpo City, South Korea
The telecommunications company KT in South Korean claimed last September that South Korea had issued more than 90 cryptocurrencies each year. Most of the local currencies were circulated in the form of actual product coupons, which made easy payment more difficult for the consumers (such as mobile phone payment).
Recently, the Yonhap News Agency released a news that a regional cryptocurrency “Gimp Pay” based on blockchain technology would be issued in April this year. According to the reports, the blockchain-based currencies could only be used by merchants in the Gimpo area, and the system would allow payment by scanning QR codes. The merchants could request the funds to be converted to legal currency in their bank accounts without additional fees.
Kaohsiung Coin in Taiwan, China
According to China Times in January 2019, Kaohsiung City announced the issuance of the regional cryptocurrency “Kaohsiung Coin”. The users can use the “Kaohsiung Coin” as a kind of feedback. Those who spend in the three major business districts in Kaohsiung will be “gifted” with Kaohsiung Coin.
According to reports of relevant media, the app about Kaohsiung Coin will be launched on the 18th. After cash or mobile payment, the amount of consumption will be accumulated on the APP. The government hopes to remain the money in Kaohsiung through the accumulated consumer feedback on APP.
Pan Hengxu, the Tourism Director of Kaohsiung City, pointed out that the concept of “Kaohsiung Coin” came from the blockchain instead of the “patents of anyone”. It must be integrated with the night market, business district and neighboring stores. The more used, the easier to succeed in payment on eating, drinking and entertainment. The Kaohsiung Tourism Bureau also intends to set up a department to promote the “Kaohsiung Coin”.
Gao Zhenyuan, acting director of the Kaohsiung Economic Development Bureau, said that “Kaohsiung Coin” was a very new and highly topical concept. By means of the virtual currency, it’s expected to attract more consumers and cashflow. The city government has previously subsidized NT$500,000 to the Greater Kaohsiung Business Circle for market promotion.
PHX in Philippines
According to PhilStar Global, the Union Bank of the Aboitiz Equity Ventures launched a cryptocurrency called PHX to be linked to the country’s legal currency, the Philippine peso (PHP).
Arvie de Vera, senior vice president of Union Bank, said that PHX issued by Union Bank was intended to serve as “a stable value storage and exchange medium. It’s a programmable token with self-executing logic, which can make payments transparent and automatic.”
According to PhilStar Global, three rural banks – Summit Rural Bank in Luzon, Progressive Bank in Visayas and Cantilan Bank in Mindanao – have already accepted PHX as the way of payment, transfer, redemption transaction, domestic remittance and other operations on the i2i network.
- Official site: https://phoenix.redpulse.com/
- Whitepaper: https://phoenix.redpulse.com/wp-content/uploads/Phoenix_DevelopmentPlan.pdf
J Coin in Japan
According to Phoenix Finance, Yasuhiro Sato, Mizuho Financial Group President, said at the end of last year, Mizuho planned to issue cryptocurrency J Coin with other Japanese banks next year. Mizuho planned to test it in one or two cities in Japan in March this year. Yasuhiro Sato said that it’s important for the currency to be compatible with Alipay.
It’s reported that J Coin provides mobile payment and transfer services for individuals and enterprises. The “J Coin” is bound to the bank account so that the yen in the bank can be exchanged for “J Coin” in advance. When checkout, the QR code is scanned in the store through the smartphone application. In addition, there are no handling fees for transfers among individual payments and overseas transfers are also much cheaper. Meanwhile, “J Coin” will not suffer from any price fluctuations like bitcoin since it is equivalent to the yen. The currency is expected to be widely used in 2020 and the value of the J Coin will be linked to the yen.
- Official site: https://j-coin.jp/
Ora in Orania
In 2004, Orania had its currency only used in local community, Ora. Being issued by the Central Bank of Orenia, it’s more like a voucher and those who use Ora can enjoy the corresponding discount. Each Ora is valid for 3 years, but it can only be used in the small community of 1,600 people.
In July 2017, the Oranian government began the test of cryptocurrency, E-Ora. According to Dawie Roodt, an economist who participated in the E-Ora experiment, “E-Ora can better protect the local economy of Orania in the context of the overall economic contraction and possible excessive depreciation or excessive inflation in South Africa.”
E-Ora tokens can be transferred directly between electronic wallets without commercial banks. Therefore, the consumers and businesses can save 3%-5% of the fees in each transaction.
Rik Willard, director of Digital Money Consulting, also said that if E-Ora tokens would be accepted in future exchanges, not only the token value would increase itself, but also more communities around the world would be encouraged to issue their own tokens.
At present, “city coins” have been issued on six continents. However, most of them are still in the conceptual and planning stage and some look more like the points and coupons.
However, it’s undeniable that with the emergence of “city coins”, the more applications of bitcoin and the access of some tech giants such as Facebook’s Libra as well as concerns of many central banks, the reform of cryptocurrency and digital assets has been widely spread around the world.
The cryptocurrency itself is a technological revolution, so why not make a bold attempt?