The Beginning of the End for Fiat Currency: Government-Issued Crypto Gaining Traction Worldwide

The core tenets of cryptocurrencies - decentralized ledgers and trustless cryptographic payment clearance - are antithetical to government control over value transfer.

Officially sanctioned government issued cryptocurrencies are increasing in number, however.

Cryptocurrencies may provide technologist libertarians with a vehicle for value transfer outside of the regulatory reach of government, but the core technology that drives them is highly attractive to the financial arm of any state.

Countries like Russia and Japan have announced research initiatives focused on the viability of solutions such as a "Cryptoruble" or "J-coin," but a number of states have already made government-issue cryptocurrencies a reality - with varying levels of success.

Venezuela's highly controversial Petro cryptocurrency is a strong example of poorly-implemented blockchain technology applied to state-backed currency.

Venezuela's socialist president Nicolas Maduro recently mandated that banks must accept the commodity-backed crypto despite virtually no real-world use of the cryptocurrency.

More than 60 municipalities within the region currently use gift certificates issued by the local government as part of an initiative intended to bolster local economies and prevent capital flight - the new "Gyeongbuk Coin" will see 100 billion won worth of the state crypto issued annually.

While states may issue cryptocurrencies in an attempt to optimize fiat currencies or to shift the direction of the blockchain revolution, the distribution and management techniques used to regulate fiat currencies are arguably incompatible with cryptocurrencies.

Promoting the adoption of cryptocurrencies - state or otherwise - and educating a populace on their use is arguably a double-edged sword for a state apparatus.

State cryptocurrency as a fiat replacement is far more likely to catalyze further adoption of decentralized, open-source cryptocurrencies that magnify the effect of the blockchain revolution, further weakening the structure of the fiat paradigm - as evidenced by rapid-onset large-scale adoption of cryptocurrencies as a fiat alternative in Venezuela.