Bitcoin, the world's most expensive cryptocurrency, will
soon become a form of payment in the German-speaking country of Liechtenstein.
Daniel Risch, who serves as prime minister and finance minister for the world's
sixth-smallest country, announced the development earlier this week.
The move is expected to avoid exchange rate risk by
accepting Bitcoin deposits and converting them directly into the country's fiat
currency, the Swiss franc. At the time of writing, Bitcoin is trading at
$27,710 (roughly Rs. 22.7 lakh), or CHF 24,658.
"The option to pay in Bitcoin is coming," Risch
told Handelsblatt, a German business daily.
For the first time of accepting bitcoin payments, the
provision will be transferred to some government services. What these services
will be, will not be revealed at this time.
The cryptocurrency, founded in 2009, reached $68,000
(roughly Rs. 55.7 lakh) in value.
The United States, right now, is experiencing a crisis in
its traditional economic system with a backlash against banks and a backlash in
raising interest rates.
Countries around the world are looking to reduce their
reliance on the US dollar as a reserve currency or exchange rate. This
phenomenon is also called "de-dollarization".
Global financial giants such as Morgan Stanley and JP Morgan
Asset Management have predicted lower dollar strength as the US Federal Reserve
tightens controls.
Under these conditions, cryptocurrencies have become a
recommended investment tool for investors and money managers to test.
For example, Zimbabwe is considering launching a gold-backed
digital asset to stabilize its economy due to dollar volatility. Currently, it
is not known when Liechtenstein will start accepting bitcoin for consumer use.
Risch said that while he understands the scope of change in
cryptocurrencies, he thinks now might be a good time to introduce
cryptocurrencies as part of his current financial system.
“Cryptocurrencies like Bitcoin are still dangerous. But this
research can really change," added the Prime Minister of Liechtenstein.