The evolution of the economy.
The mention of digital weight in the presidential debate by the minister of economics and candidate for the Union for the Homeland front, Sérgio Massa put on the table the consideration of a new tool, unknown by some and feared by many others.Undoubtedly, resistance to change has been a constant in the face of any technological evolution. Threats about biblical catastrophes and terminal crises have been currency before any of the important changes that existed in humanity.On this occasion, we will examine the characteristics of the different means of payments and processing systems with which we count today and what are the differences and opportunities that each represents.Payment means.
In principle, we will consider three groups:- Physical money, consisting of coins and legal course notes, whose transmission form is produced by mera tradition or delivery and whose property is the bearer, is to say that it is of who has, in his hand, pocket or safety box.
- Electronic money, which represents all the monetary expression recorded in an accounting system Bank or payment processing system company, whether electronic wallet, credit card or debit.
- Digital money, thus understanding a sovereign currency, i.e. issued by the state, which may or may not have a preestablished emission rule and circulating through a public processing system and which could be developed in blockchain technology. Normally called CBDC by English acronym Central Bank Digital Currency or digital currency issued by the central bank.
Qualities.
At this point we will analyze some potentialities that have these alternatives, as they are:- Independent infrastructure. In this variable we analyze whether the monetary type we analyze requires certain infrastructures for their transmission and harassment.
- Confidentiality. Regarding the preservation of personal data, transactions and balances that are owned in each of the variants.
- Recaution. If the system in question allows you to realize perceptions or tax deductions either by transaction or by automatic debit.
- Auditable. It refers to the possibility of reconciling balances by authorities or supervisory bodies in the event of fraud or crime.
- Traceable. Regarding the following sequence of operations and the route that had the money since it was issued to a certain time.
- Reducible. This point considers the possibilities offered by the monetary format to lay down rules for the reduction or burning of the monetary base so that, in the face of a need for the reduction of the monetary supply, a system of burning by transaction can be used.
- Right. Referring to the possibility of designing transactional payments ecosystems to guide the monetary flow between different actors of the economy, for example, assistance and development.
Comparative table
Regarding infrastructure demand, physical money requires equipment and materials for your initial printing. It also resorts to the use of physical safety supports for transportation and large-volume harassment. However, for the realization of most domestic payments is the alternative that less technological infrastructure needs, as others use electrical energy and data processing systems, such as point-to-point networks or the Internet to annotate records and make data custody about balances and movements.With regard to the confidentiality of the origin and fate of the funds, physical money is the alternative more reserved For its quality of giving the purchasing power “a bearer” makes the nominativity of transactions prescindible. Something similar could occur with digital money, if you choose to incorporate as an alternative to store balance to the cold wallets or calls that register positions outside the centralized systems and to process payments, do them in the peer to peer format, i.e. between equal parts, without needing a processor as an intermediate In return, electronic money always identifies the issuer and receiver of a payment and requires the services of intermediate private companies. That is, physical money preserves the confidentiality of movements, electronic money exposes each of its operations and digital money is parametrizable in this aspect.Given the possibility of using the means of payment processing or money transfer as a tax collection system, the physical money is the most difficult the tax agents, that is why it is elected to the marginal businesses, the crimes and the informal economy. Electronic and digital alternatives facilitate the collection of perceptions, retentions and discounts on recorded balances so that they facilitate the work of agents and foster the formalization of transactions.Regarding both the money circulating and the balances attested by their forks, the physical money is difficult to audit, as one can hide, falsify or multiply, understanding as such the real money issued and not registered. Instead, electronic and digital alternatives have database supports and systems that allow real-time auditing emissions, balances and positions.The same occurs with the traceability of the operations, as we have seen, the representative forms of the money have the quality of being bringable or traceable, because all the movements are carried out between nominal accounts, i.e. the history of intervention headlines, the amounts involved and the dates of each operation.The next two qualities to consider are those that make, from the point of view of their functionality, the “great difference” against the alternatives of physical and electronic money.That is reduced implies that it allows to define an emission rule so that under certain circumstances “cheme” circulating. This concept is usual in the world of cryptocurrencies that seek to value their denomination through the planned decrease of their offer.Perhaps here is one of the enormous potential that this version of money, in particular to address issues related to the distribution of income, inflation, fiscal and fiscal models.The same occurs with the possibility of being “directive”, i.e., a same kind of currency serves to be consumed in specific locations and/or in predefined goods or services. Tools such as this could be fundamental to support migration of welfare plans for employment and investment.Traditional means of payment, both physical and electronic, have been designed to ensure that those who deliver a product or provide a service receive the agreed contract.Digital money, in addition to fulfilling the functionalities of other alternatives, adds adaptability to changing circumstances of business and public administration.Another key aspect for citizens is that digital money reduces the participation of intermediaries, both to maintain available balances and to make payment processing. Thousands of millions of dollars a year are spent on these services.Undoubtedly, economies like Argentina will be very strengthened with the use of tools like these, as they make the difficulty in opportunity. Do you want to validate this article?
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horacio gustavo ammaturo
I am Gustavo Ammaturo. I have a degree in Economics. CEO and Director of infrastructure, energy and telecommunications companies. Founder and mentor of Fintech, DeFi and software development companies. Blockchain Product Designer.
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