Export Crypto: A Paradigm Shift in Digital Currency Anchored to Economic Fundamentals and Global Trade

Document Type : Research Paper

Authors

1 Faculty of Economics, University of Tehran, Tehran, Iran.

2 Financial Engineering Department, Allameh Tabataba’i University, Tehran, Iran

3 Department of Technology and Society, The State University of New York, Incheon, Republic of Korea,

4 Azman Hashim International Business School (AHIBS), Universiti Teknologi Malaysia, 81310 Skudai, Johor, Malaysia

Abstract

This paper introduces an innovative model of Central Bank Digital Currency (CBDC), offering a novel perspective on its design and functionalities. It presents an innovative approach to digital currency design, introducing "Export Crypto" as a novel cryptocurrency that diverges from conventional Central Bank Digital Currencies (CBDCs) by anchoring its value not to fiat currencies but to intrinsic economic factors and global trade dynamics. In contrast to traditional CBDCs, our model relies on the principles of purchasing power parity (PPP) to establish a more robust and transparent link between the cryptocurrency's value and real economic activities. The core parameters for assessing the value of Export Crypto revolve around equitable trade balances among nations and their respective export volumes. This approach fundamentally deviates from the conventional practice of pegging digital currencies to a country's fiat currency. Our research findings underscore that a cryptocurrency rooted in economic fundamentals can offer a more effective tool for managing the money supply, particularly in regions where traditional CBDCs may not be optimally suited. Furthermore, Export Crypto's design has the potential to foster fair-trade practices and encourage sustainable economic growth by aligning its worth with a nation's economic prowess and its trade interactions on the global stage. This groundbreaking approach to central bank digital currency opens new avenues for enhancing economic stability and promoting equitable international trade relationships.

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History

  • Receive Date: 07 October 2023
  • Revise Date: 27 March 2024
  • Accept Date: 13 May 2024

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