Virtual Assets: Suitable Tool For Political Leverage?

It was written a lot about the fact that the cryptocurrency had long been an instrument of politics. However, until now it was a question of a big game, a clash of interests between superpowers and the confrontation of economic systems. However, the problem is scaling up, as the financiers would say. Mayor of Naples Luigi de MAGISTRIS said that the city is ready to issue its virtual coin. But only if the discrimination of the Southern provinces in the country continues.

Centrifugal processes in Europe have generated many ideas with varying degrees of adequacy. However, the creation of a separate urban monetary system in the Old World began being discussed for the first time. According to the idea of the City Hall of Naples, the city's ICO should become a part of the roadmap for the acquisition of political and economic autonomy in the Campania region. In addition, the head of the city once again stressed that Rome's policy towards the Southern regions of the country was flawed and even criminal. The authorities of the country, in his opinion, encourage the development of the two richest provinces only: Lombardy, with its capital in Milan, and Veneta. The South receives subsidies and preferences on a residual principle.

In addition, the mayor assailed the euro with criticism, calling it even "a foul currency." It is no secret that a single European monetary unit causes waves of skepticism in Italy. It turned out that the structure of the economy of Southern Europe was somewhat different from the structure of the Center or the North. Residents of predominantly agricultural countries, Italy, Spain, and Hungary do not need an extremely expensive euro. It makes their products uncompetitive, especially against the background of cheap Chinese and Brazilian imports. With the introduction of the euro, people began working harder but earning less. Only industrial regions are interested in a unified currency, which the mayor MAGISTRIS scolded.

By the way, the authorities mentioned by the mayor of the Northern provinces recently have spoken about the same thing. Adding: “Enough to feed lazy South!" One-third of Italy's GDP, indeed, falls on two industrialized regions. In particular, Lombardy brings 20%, and Veneta - only 10%. But the northerners did not state their own cryptocurrency.

This is the first time in Europe, when separatist sentiments lead politicians to a thought about creating and developing tools for the digital economy, but not the first in the world.

In winter this year, the municipal authorities of Berkeley (USA, California) announced their desire to conduct a municipal ICO. This step was a response to Donald Trump's tax reform. Reducing the burden on large taxpayers, individuals and legal entities, led to the fact that in the poor suburbs, the program for the construction of affordable housing actually stopped. In particular, it affected Berkeley, which is, in fact, a monocity that had arisen around the famous American University of the same name, whose budgetary financing was sharply reduced.

The politicians did not conceal the demonstrative nature of the crypto-initiative: thus, the city wants to isolate itself from the federal center and its pernicious monetary policy. "Berkeley has always been the center of confrontation, but for this confrontation to work, we need our own money," the local council member Ben BARLETT said. The majority of people's deputies agreed with him.

Earlier, the residents of the Japanese village of Nishyavakura voiced the idea of releasing their own virtual asset. The project is called "Centennial Forest", and it aims to attract tourists to the ecologically clean area of Okayama Prefecture, where the settlement is located.

A cryptocurrency is a universal tool. Nevertheless, this multitasking has its opposite side. It is good that every mention of this economic phenomenon brings political scores to the participants of big and small games. This indicates its social relevance. On the other hand, the basis for capitalization of most virtual assets is the trust in them and the ecosystem where they are in demand. Once a rough and cynical politics begins to intrude into this subtle space, the trust will begin to erode, and, consequently, the capitalization of virtual assets will fall. So will the price.

It is not necessary to go far for the examples -  against the background of political quarrels, the euro fell to a six-month low. Moreover, with each new statement or demarche, its volatility is growing. The unified European currency is swinging with the EU. The same thing is likely to happen with the crypto.

The political pump, like the investment one, cannot work for a long time, but it is more difficult to get out of it. That is practically impossible.