For example, in the US, 20% of all the US$s ever created was done so in 2020. While the intention was to protect jobs and shield economies from the impact of lockdowns, the result was that many people received payments they arguably did not need – undoubtedly we have seen the savings rates jumping considerably.

European savings

Source: ecb.eureop.eu

In France, companies received up to 100% of the previous year’s trading profits as a cash compensation as part of a $424billion COVID-19 stimulus, even though some businesses, again, did not need the payments. Meanwhile in the US, its citizens are sitting on a cash pile of $2.3trillion, having had a huge boost due to COVID-19 payments being made (at $1,400 per person) as part of the US’s $1.9 trillion economic recovery package. These payments were made regardless of the financial need of the individuals. The reason for highlighting this is, were governments able to target payments to those in real need, then the cost to those nations’ finances would have been considerably less. 

A more extreme example of the way in which Digital Assets can be paid is in China where the government has been trialling its new digital Yuan, due to be launched at the Beijing Winter Olympics in 2022. Selected on a random basis, the Chinese government has been giving its citizens the equivalent of $30, in the new digital Yuan, at a time, on condition that the money can only be spent in certain approved places and typically has to be spent with 5 to 10 days.

Trials for the Chinese Digital Yuan

Source: Fokast

The Hong Kong state has just released details of its proposed e-HKD (state-backed digital currency) that will run alongside the Hong Kong $ which, itself, is pegged to the US$. And, interestingly, another country just recently announcing that it is looking to launch its own CBDC is Georgia. In the US, there have been demands for stablecoins to be backed 100% by cash deposits - rather ironic as it would be impossible for banks to repay savers for the deposits they have made with the banks. Nevertheless, there are a number of existing stablecoins with further ones being planned that are/intend to be 100% backed by cash deposits.

In Digital Bytes we have written many times about CBDCs and stablecoins since this is a topic repeatedly asked about, especially as many organisations are looking at the accounting, legal, custody, banking, treasury and technical requirements  Not only do CBDCs offer governments greater control to issue capital to those most in need of financial assistance, but a digital currency could prove to be a way to tackle the challenges of the shadow economy and its citizens not paying the correct tax that is due. Without doubt we will see a number of governments issue CBDCs over the coming years and potentially a number of corporations will issue their own stablecoins too - but that is all for another day!

How the world has become urbanised

Source: World Economic Forum

In more simplistic terms, a smart city looks to improve transportation, reduce congestion, and create more inclusive social services all the while being sustainable, so making the city a more desirable place to live and, in essence, solving the challenges of urbanisation such as increased demand for energy, water, transportation, waste disposal by using technology. City planners are realising that to make cities fit for purpose and ‘smart’, data is the key. Technology, such as Internet of Things (IOT) connected by using Blockchain-powered platforms, offers some real advantages in terms of collecting, managing, holding, and sharing data in a distributed but secure manner. This is opposed to centralised systems (which often lack the ability to scale and are reliant on one organisation) having control of all the data and, even worse, if hacked or subject to cyber-attacks the database is reliant on only one point of failure.

For example, a Blockchain-powered platform can store the history of vehicle accidents, their maintenance, miles driven, when and by whom. From this, premiums could be adjusted (depending on particular vehicles and the drivers) since data on insurance claims and maintenance parts can be processed automatically based on IoT devices inside a vehicle. Furthermore, as regards transportation, research has been carried out looking at how to try and minimise Particulate Matter (PM) from tires and brake dust with the use of Blockchain technology being chosen because the researchers claimed this technology had the ability to: 

• respect the privacy of individuals,

• be trust-worthy,

• offer fair access to the geographic area for all citizens. 

All of these are important in developing human centric solutions to technical Smart City problems.

In the US, there are plans to create a smart city called Painted Rock in the state of Nevada, covering 68,000 acres. Unveiled last year, the plans envision a city of more than 36,000 residents, 15,000 homes and 11 million sq ft of commercial space. Blockchain LLC (the company behind these plans) estimates that eventually the city will generate $4.6bn in output annually and will be run using Blockchain technology. In Dubai, there are even greater ambitions with Digital Dubai stating: "Adopting Blockchain technology Dubai stands to unlock 5.5 billion dirham in savings annually in document processing alone — equal to the one Burj Khalifa’s worth of value every year. The Dubai Blockchain Strategy establishes a roadmap for the introduction of Blockchain technology for Dubai and the creation of an open platform to share the technology with cities across the globe. The Dubai Blockchain strategy is built on three pillars of government efficiency, industry creation and international leadership.” In order to fulfil its ambition to be a smart city using Blockchain technology, the Dubai Future Foundation has created the Global Blockchain Council. The Council will have 46 members including government representatives, global firms, UAE banks and international Blockchain technology firms.