The Argentine Blockchain Foundation presented a proposal that aims to reactivate the savings capacity of Argentines. The creation of an Argentine Digital Currency (MDA) based on Blockchain technology, as specified, is presented as an opportunity to establish a legitimate and sustainable means of savings.
One of the pillars of this proposal is that the Argentine Digital Currency is not linked to the price of the Argentine Peso in the physical market. Instead, the MDA should be backed by the US Dollar through a special reserve system at the Central Bank of the Argentine Republic (BCRA). This means that The MDA would be issued in direct proportion to income in US dollars and an issuance and reserve system of equal proportion would be maintained, that is, 1 to 1.
“The implementation and control of this issuance would be in charge of an intelligent contract or Smart Contract. This would connect the real reserves in the BCRA with the issuance of the Argentine Digital Currency, generating new tokens according to user demand and allowing destruction of tokens when users choose to exchange their MDA for fiat money in US dollars,” it was officially explained.
What are the benefits
The adoption of the Argentine Digital Currency would offer a series of benefits to small savers. “It would give them the opportunity to save on a digital currency backed by the BCRA and subject to national jurisdiction, offering a solid legal framework compared to foreign digital currencies. In addition, it would provide greater security and comfort to use their savings in commercial transactions or acquire goods and services at the time they consider convenient,” it was described.
Besides, MDA could be a solution for the purchase and sale of high-value assets, such as property, automobiles, agricultural machinery, or productive assets. In this regard, they indicated, this would guarantee a safer mechanism for all parties involved in these operations, contributing to stability and confidence in the market.
What are the steps for its creation?
To achieve the implementation of the Argentine Digital Currencyseveral fundamental factors should be studied: “Legal application of the Smart Contract to control the issuance, design and architecture of the Smart Contract in terms of issuance and burning of tokens, connection of the Smart Contract with an oracle that validates reserves in US dollars, study of banking interoperability in Argentina and abroad with the MDA and determination of the financial entities that would operate as intermediaries in the operation and their commissions.
The last point of the study is the possible application of a remunerated rate for MDAs blocked for a certain period of time, serving as a financing method for the national treasury. In addition to the evaluation of its application in conjunction with a Law on the Externalization of Undeclared Assets.
The Argentine Blockchain Foundation’s proposal “represents an innovative and bold approach to addressing the economic problems facing Argentina. The adoption of an Argentine Digital Currency backed by the US Dollar could offer a path to financial stability and confidence in the monetary system of the country,” they expressed.
In this regard, they indicated that “at a time when inflation continues to be the greatest challenge we face, “MDA has the potential to create new opportunities for Argentine citizens in search of a safe and reliable means of savings.”.
Source: Ambito
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