[ACCI-CAVIE] The digitization of the dinar announced by the Algerian Prime Minister is none other than the creation of an Algerian cryptocurrency. This new currency is in addition to the two others called fiduciary (paper money) and scriptural (money written on current accounts of banks).

The cryptocurrency is therefore a real currency created by the Central Bank (State). Not to be confused with private cryptomoney which is based on assets, therefore without a guarantee from a state and whose assets can be swept away by winds that would blow on the Wall Street Stock Exchange. These private cryptocurrencies do not scare Americans, except when it was Facebook that wanted to create its cryptocurrency. It was blocked by the U.S. Federal Reserve (Central Bank) who saw a danger against the dollar. The strength and power of this group, which relies on new technologies, risked overshadowing the dollar. This is not the time for an American company to participate in the de-dollarization of the world economy…

The digitization of the dinar is an asset that the government is giving itself to adapt to the upheavals underway in the world, both economically and geopolitically. Economic and political powers are emerging and can no longer bear to submit to the almighty power of the dollar, which controls the global financial circuit. And as this was not enough for the world’s policeman, he pushed the envelope further by imposing sanctions and freezing the assets of countries deposited in his banks and those of his allies. And as if that wasn’t enough, it even allows itself to pay its darling of the moment (Zelensky) billions of frozen assets belonging to any recalcitrant who doesn’t want to bow down. To escape this “new capitalism” that betrays the elementary rules of historical capitalism, a capitalism that is more arrogant than the new one, that puts a line on banking secrecy and goes to dip into the accounts of clients for political reasons. Against these piracy practices, many countries are trying to do without the services of the banks, which are becoming a sort of armed arm of the world’s policeman in the same way as the American army or the CIA. Many countries, members or not of the BRICS, are nowadays turning to the state cryptocurrency to trade without having to use the dollar. This technique can be doubly beneficial. First, it allows them to save the dollar that they reserve for trade with countries that do not accept (digitized) cryptocurrencies for multiple reasons (political and economic). Secondly, it strengthens the national currency in its trade with other crypto-currencies. With countries like China, India, Russia, Iran because these countries can resist politically to the American pressures…

But before we get into the tricky issues that make it possible to benefit from the two advantages mentioned, let’s look at the problems to be solved for a country like Algeria. A digitization of the dinar that would provide the country with a cryptocurrency requires a solid currency and benefiting from the confidence of national entrepreneurs and those of the BRICS countries that could use their own state cryptocurrency to trade with Algeria. And what says solid currency says a currency delivered and backed by real wealth that implies a production apparatus “armed” to “dialogue” as an equal with the economic environment. It is therefore necessary to solve the weakness of the dinar and there is no mystery. The value of a currency is based on the quantity and quality of work invested in the manufacture of a product (1). To these requirements that apply to the traditional currency (paper money and coins) which can be victim of the money printing, the cryptocurrency implies that it is protected from the money printing. To escape the latter, countries are basing their digitized currency on gold to win the confidence of foreign companies or countries. This operation implies to shield this digital currency behind a wall of computers and a legal arsenal hardened in steel so that one does not come to dip into the cryptomoney to fill small deficits here and there. This implies an administration built on a competent architecture because it handles “abstract tools” (Internet, computers), not to mention the pitfalls of the tortuous paths of international trade finance.

E-dollarization has been introduced into international trade for political as well as economic reasons. The political tool of the dollar has become a weapon against the sovereignty of states, even though the countries are economic giants and allies above all (Japan and Germany) (1). It hinders or slows down trade between poor countries whose dependence on the dollar and on institutions (IMF and World Bank) puts these countries at the mercy of these institutions that put their noses on their budgets (drastically reducing social spending to pay the interest on their debts or to repay their debts by borrowing again and again). The exorbitant power of the dollar was conquered, or rather imposed, by the Americans in the aftermath of the World War. As always, the vertigo of power fuels the frantic search for gain and allows one to free oneself from constraints thanks to this power. This is what the United States did in 1972 when Nixon, in order to finance “his” war in Vietnam, broke the gold/dollar parity which gave the right to any ordinary citizen or state to go to an American bank and receive the equivalent in gold against the greenback.

Algerian cryptocurrency and BRICS

While waiting to “update” the production apparatus and invest in science and new technologies, to break the locks of bureaucracy, archaisms and charlatanism, the cryptocurrency will facilitate trade with the BRICS and other countries in Africa. While waiting for the solidity of the dinar and the fluidity of exports with the BRICS, Algeria can be inspired by the example of countries that exchange between them through the digitization of their currencies. Algeria can follow this example of basing the part of the money supply digitized on gold that would reassure foreign companies interested in the Algerian market. It is obviously necessary to study and remove the obstacles, both legal and technical to succeed in such an experiment … By AP and LB