Tunisia is to follow in the footsteps of countries like China and create its own sovereign digital currency, according to a Russian news outlet. Tass reports that the Central Bank of Tunisia (CBT) will issue a digital version of the Tunisian dinar, initially dubbed the ‘E-dinar’, using Universa Blockchain, a platform created by Russian developers, with the Central Bank of Tunisia able to use the transparent nature of blockchain to see the details of each transaction, including the seller and buyer.
E-dinar Enjoys Successful Test Drive
The new form of currency was officially launched at the Forex Club of Tunisia last week, where a test transaction of one dinar was sent to a representative of the International Monetary Fund (IMF) from the head of the CBT, Marouane El Abassi. Universa say that Tunisia is the first country to issue a central bank digital currency, in contrast to Venezuela who are essentially running a private cryptocurrency in the Petro. E-dinars are already available for citizens to transfer between themselves, with retail establishments slated to start accepting the currency in 2020. The central bank also plans to use the new currency format in cross-border payments, circumventing the need for US dollars and speeding up such payments hugely.
Privacy Concerns May Stifle Uptake
Alexander Borodich, Universa’s CEO, was careful to make the distinction between officially sanctioned bank-issued digital currencies and cryptocurrencies like the Petro and Facebook’s Libra, also telling Tass that the new system has huge benefits over the existing one:
Electronic banknotes cannot be faked – each such banknote, like the paper version, is protected by cryptography, it, like the paper counterpart, has its own digital watermarks. And the production of such a banknote is 100 times cheaper than wasting ink, paper, electricity for the printing press.
Universa began work on the E-dinar platform around a year ago, with strict controls in place to make sure it cannot access any of the information stored on the blockchain, such as encryption keys or transaction records. While the fast, cheap, and convenient payment method may seem appealing on the surface, the ability for the central bank to effectively spy on individuals and how they are spending their money might hinder adoption somewhat.