The history of the cryptocurrency is a short, but eventful, one. It was in 2009 that Bitcoin first appeared on the scene, the brainchild of a shadowy, possibly Japanese, developer. But it’s only in the last couple of years that cryptocurrencies in general have started to hit the headlines. Bitcoin’s dramatic increase in value and subsequent volatility is what grabbed most people’s attention but many were still unaware of just how many other cryptocurrencies had been invented too.
For some these represented the opportunity to speculate on the crypto market while others began to see them as an alternative way to pay for good and services without involving an intermediary. As the popularity of cryptocurrencies has grown from them being a niche phenomenon to gradually entering the mainstream it’s not surprising that both governments and banks have started to show an interest, as well as to ask questions about possible regulation.
But a number of them have gone even further and are actively considering issuing their own cryptocurrency. While the one that concerns us here today is Dubai’s emCash, many places including Sweden, Singapore, China and even Russia are believed to be in the process of creating their own versions of currencies that will depend on the blockchain.
The Dubai version of the currency is, initially at least, intended to be a method of making contactless payments for everything from utility bills to a cup of coffee from participating retailers. Users will need to download the emCash app onto their smartphones to use the currency and this will incorporate a digital wallet.
It’s being developed in collaboration between Dubai Economy and the UK-based company Object Tech which has already helped to establish a digital passport system and is all part of Dubai’s ambition to become the world’s very first blockchain city.
Ali Ibrahim of Dubai Economy has already made an announcement about the benefits that he believes emCash will bring:
“A digital currency has varied advantages – faster processing, improved delivery time, less complexity and cost, to name a few. It will change the way people live and do business in Dubai, and mark a giant leap for the city in harnessing game-changing innovations to improve ease of business and quality of life.”
Another feature of the new currency is that it is a so-called “stablecoin” – namely a cryptocurrency but one which is linked to a fiat currency as well. While this may fly in the face of the guiding principle for alt-coins, namely independence from the state or established final institutions, it should also protect against the volatile fluctuations in value seen in other cryptocurrencies. So although this may not be so pleasing for speculators looking to exploit the rise in the BTC price it is undoubtedly reassuring for those wishing to use emCash as a currency in its own right. It’s hard to say what effect this may have on the general market as a whole as this is only likely to show its effects after it’s been in use for a while.
However one big advantage that emCash will have from the very start is that the blockchain technology that supports it will ensure that transactions are secure. But, on the other hand, the anonymity that using it brings has also been exploited by criminals in the past so the authorities in Dubai will have to be 100% sure that all the necessary security features are in place to prevent this from happening.This shouldn’t be an issue as there are the experienced hands of Dubai Economy and Object Tech behind emCash so we can be reasonably confident that all risks have been considered and solutions to them put in place.
Now it just remains to be seen whether the residents of Dubai will be willing to come on board with this innovative and forward-thinking method of payment – and there’s every reason to expect that they will.