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Japan: Will The Largest Shipping Company Shanghai Up Their Seamen For Stablecoins

28 November 2018 17:01, UTC
Oleg Koldayev

Now, the situation that many analysts have spoken about is happening on the digital market: against the background of the fall in the bitcoin exchange rate the popularity of different stablecoins will increase. And as if in confirmation of the guess, an interesting piece of crypto news has appeared: the largest Japanese shipping company Nippon Yusen has announced its intention to issue its own digital monetary unit to pay the salaries of the crew members. One coin will cost $1.

At the disposal of the Nippon Yusen, there are more than 800 ships sailing under different flags, and on each ship, there are several dozens of people, from the captain to the sailor. The total number of company employees exceeds 50 thousand people.

On the one hand, digital assets are a convenient means of payment for employees. For example, today, they prefer to pay to seamen in cash. To do this, $40-60 thousand is taken on each board. However, this type of payment brings up many questions, both from the side of trade unions, which monitor the observance of working conditions on marine vessels and from the state control agencies. At the same time, in the mid-ocean, for obvious reasons, it is difficult to use traditional electronic transfers, and the sailor should be rewarded for each shift. Digital currency will make the life of the captains who are responsible for all financial issues in the voyage much easier.

Moreover, the use of virtual assets can reduce accounting, financial, and time costs, since crew members are often not subjects of Japan, and this creates additional difficulties in the case of transferring money to their bank accounts. In the future, the cargo company plans to create a system of operational financing of each ship in a seaway with the help of virtual assets. To do this, the company is testing the technology that would allow payments using ship electronic systems, in particular, navigation and tracking satellites.

Now, the corporate cryptocurrency project is in the developmental stage and, therefore, is not strongly advertised. The company's management is engaged in negotiations with banks, financial regulators, and software developers on the issues related to converting coins into fiat currency of different countries (ship crews consist mainly of Chinese and Filipinos), and is also psychologically preparing employees for such a significant change.

But there is another side of the coin: there has already been the example of the use of corporate digital currency in labor relations and it has not ended very well. Russian farmer Mikhail Shlyapnikov, the head and the owner of the Kolinovo farm, conducted an ICO after the prosecutor's office had banned the use of money substitutes for paying to farm workers. During this ICO, the Kolion (KLN) digital currency appeared. Despite the fact that the entrepreneur managed to get more than $500 thousand at the crowdsale, the coin did not gain popularity, although it was secured with real agricultural products.

Of course, one cannot directly compare the Japanese shipping giant and the small Russian farm, but it is quite likely that corporate cryptocurrencies are subject to the same risks regardless of the size of the business.

And the first risk is money substitutes, which often appeared in history. Suffice it to recall the coins of the British East India Company or the coupons of the Russian-American Company that were in circulation in the 18-19 centuries. Even secured with huge capital and significant purchasing power, they could not gain the trust of consumers: people still preferred stable currency. With virtual currency, a similar story can happen: no matter how powerful and rich a company is, it is unlikely to be able to provide the level of trust in coins that the state gives.

The second risk is the lack of freedom. From the history and world literature, we know the meaning of the term “to shanghai”: this is when, at the end of the 19th – the beginning of the 20th century, sailors were lured into merchant ships, where they worked forcedly then, unable to get ashore. Their work was paid significantly below the market value of labor and only after several cruises or even several years of being on board, upon presentment of payment vouchers from the captain to the shipping company.

In the case of Nippon Yusen, the story can repeat. In China, where most of the company's employees come from, the circulation of digital currencies is actually prohibited. Even having a pretty penny in corporate crypto-money in his electronic wallet, a sailor from China will still not be able to exchange them either for dollars or yuan. And he will have to contact the company for the exchange of digital coins for fiat money, moreover, at the rate set by the employer. If this happens, it will be a violation of all conceivable Labor Codes.

It is difficult to assume that managers and lawyers of almost the world's largest sea cargo company do not notice such obvious things. It is quite likely that the reason for the emergence of the crypto project is different, more specifically - the growth of popularity of stablecoins against the background of the bitcoin crash and the fall in the exchange rates of other digital assets. Probably, the company just wants to play on the crypto market, and the management has come up with an information campaign for shareholders and the Mass Media.