With Blockchain, now EVERYONE can be a “central bank”

[EvaGC]

Currency baskets are portfolios made of selected currencies with different weightings, they’re commonly used to minimise the risk of currency fluctuations. The selected currencies inside the basket and their weighting depend on its purpose. Our experts have found that currency baskets can be the best solution for a variety of needs and situations… the problem? It was only reserved for big institutions and banks. But that’s about to change.

Why do Central Banks use currency baskets?

In a globalised world, a national currency does not always represents the wealth of their citizens, it’s just convenient for accounting or payment purposes. This is probably the reason for the growing trend among Central Banks to build up their own currency baskets or to peg their national currency to a basket.

Central Banks usually use this approach to link their national currency to a set of currencies that, combined in certain proportions, fit within the fixed exchange systems. This technique is a variation to the classic “full convertibility”, but it has the advantage of a slight exchange rate flexibility without losing stability. This system eliminates the negative effects of abrupt changes when you have only one single reference currency.

For example, the value of the Yuan is made up primarily of the Yen, the Dollar, the Euro and the South Korean Won, according the Chinese Central Bank (although the specific weight of each currency has not been revealed to the public). Usually, central banks establish the weightings of each currency according to their importance for foreign trade.

Why couldn’t WE use currency baskets before?

The “currency basket” concept was previously reserved for large clients; No retail bank or broker currently offers such a basket to individuals, and public institutions such as Central Banks manage the issue by themselves. The main reason is the Foreign Exchange Market structure. They are dealing with a minimum size of several million units per currency. Very few people would have access to the network necessary to construct such an offer themselves, and the associated cost of doing this would be very difficult to cover.

The Blockchain revolution

Let’s first take a look back at what a ledger is: a large book or file for registering economic transactions. The Blockchain allows the creation of smart contracts using a Distributed Ledger system, which is a database of transactions updated independently by individual participants in a large network. This unique distribution is not communicated to participants by a central authority (like a central bank for example), but instead the record is being independently constructed by each of the contributors.

The decentralisation brought by the Blockchain Technology now makes it now possible to offer the currency basket concept to the public, enabling GLOBCOIN to provide solutions that were formerly reserved to a few privileged market participants. We can now build and distribute this product to everyone.

Read full article: https://medium.com/@globcoin_io/the-blockchain-revolution-now-everyone-can-be-a-central-bank-f3ecff2ee9b6

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[IndzheborgC]

With the crypt so usually does not work, almost all the currency's currency crashes and falls make synchronously. Maybe with a little delay. Have a basket of currencies in order to reduce long-term volatility risks will not work. But there is an exception to the USDT.

[Olrac]

That is because in blockchain technology, no one supervises your transaction but you alone. There's no organization who can access your activities which is good and secure.

[Idrisu]

Blockchain technology is one of the greatest discovery made by man and this is the system that is going to create equality in human endeavors. He have sufer in the hands of our financial system that is been control by our greedy politicians and civil servants. We are our own central bank and the power for us to control our financial system is in our hands.

[gua86402]

If everyone in the blockchain is a central bank, how can we not affect the value of the blockchain because of our individual interests?

How the block chain technology combines with the real life!

[wandino]

Blockchain technology is one of the greatest discovery. In blockchain technology, everything is decentralized as no one can alter your transaction, it becomes tamper proof and increases transparency.

[bonammeo]

Blockchain technology is almost invulnerable. Thanks to that all your activities are safe and secure. Blockchain is a great discovery.

[nazaididuan1]

The blockchain solves the long-term pain points of the traditional banking industry in terms of efficiency, cost, and trust!
The blockchain makes trading simple and fast, and the core advantage of the blockchain is that it has changed the traditional way of creating credit! Let everyone freely participate in the bank's transactions!

[yla1974]

I think this is exaggerated. No blockage, can not give you all the power that central banks have, and I generally keep quiet about the Federal Reserve. Banks are very tightly held people in the workplace. But to dream or who did not forbid, it is possible. Blocking will only strengthen the power of banks, but it will also provide opportunities for those wishing to quit the system. Bitcoin is our choice.