The World Bank characterizes small states as countries or nations characterized by a small population (less than 1.5 million people), with limited human capital, and a confined or isolated land area. Small states are challenged to prosper at optimal efficiency and effectiveness. There is no traditional development model that works for this diverse group of countries or nations.
With limited economic developmental options, and the tsunami-like effects a volatile market can create, small states need not assume added risk in applying their monetary systems and policies.
XENTAVO products and services will allow private and public leadership to focus their efforts towards development through responsible regulation of the state’s financial systems.
With a narrow economic base, small states may have difficulty to spread economic risk across productive sectors. They face more exposure to market shocks that affect income, employment and expenditure.
When it comes to paving the path towards Sustainable Development Goals, small states face many similar challenges. For example:
· The provision of public services across a small, scattered population can prove to be costly. This includes educational programs, access to proper medical treatment, and much more.
· Trade is often more difficult for small states as fixed trading costs with these often isolated nations are higher than average trading costs. These higher costs may cause consumers to trade elsewhere.
· Small island states are more vulnerable to the impact of global climate changes and natural disasters.
· Small states rely heavily on international finance to supplement their financial obligations.
· The currencies of small states are often tethered to the USD, causing currency boards to rely on flexible wages and flexible price points to absorb any shocks in the market.
· Most small states are not prepared to cover the financial costs associated with major national disasters, to include hurricanes, tsunamis and flooding.
So What’s the Solution?
Through a white label blockchain framework to structure Sovereign digital solutions and cryptocurrencies for small states, XENTAVO strives to implement a Sovereign Digital Cash System, which enables small nations to:
· Digitally run their nation’s monetary policy.
· Provide and maintain an efficient and sustainable payments system.
· Supervise and regulate their national financial operations.
The Implications of Natural Disasters on Small States
2017 proved to be a detrimental year for many of the small states located in the Caribbean. In particular, Hurricane Irma and Hurricane Maria caused significant structural and financial damage to many of these small island nations.
In Dominica alone, the 2017 hurricane season resulted in damage, which exceeded 200% of their GDP! While small countries have become masters in solving problems related to their recovery and growth, back-to-back natural disasters of this magnitude have caused many small nations to seek financial support from other countries, international charitable organizations, and private institutions.
Damaging hurricane winds, rain and flooding cause catastrophic destruction to private residences, commercial buildings, resorts, hotels, and infrastructure, such as roads and bridges. The financial damages associated with the aftermath of a hurricane go beyond structural damages alone.
Damaged businesses, hotels and resorts must close or limit their operations while they repair and rebuild. While these organizations remain closed, they cannot generate new revenue. Employees are often laid off, as their employers no longer can afford the expense of their wages. Sustained unemployment rates add to the prolonged financial and economic issues for these countries.
Small states often require urgent financial support to ensure the quick and efficient rebuild of infrastructure and damaged property in the aftermath of a natural disaster. Charitable donations, loans and tax incentives help to secure the future of these small countries, allowing businesses to pay employees as they rebuild, expediting the recovery process.
In recent years, small countries continue to demonstrate greater independence and sustained growth due to the Internet and other innovative technologies. Despite this resolve, there are still areas where dependency on other nations can be reduced, particularly when it comes to energy.
Most developed nations generate their electricity by using fuel. Unfortunately, many power plants are in hands of foreign companies that hold no vested interest in improving the conditions within these small states. Their main concern is profitability. This results in electricity costs significantly higher than costs in larger countries. Small state governments would significantly profit in the long-term by investing in alternative energy solutions.
Another example: “Prime Minister Browne (Antigua and Barbuda) announced to the IMF his decision to decline a second agreement and his plan to repay the looming debt as soon as possible…..During a session with his cabinet, Prime Minister Gaston Browne announced that the treasury has only a US$13 million outstanding debt remaining of the US$118 million (from 2010) assumed by his predecessor.” Telesur Published 30 October 2017. Here is the problem: debt is always a burden on countries, as paying them off is expensive and takes time. But not getting any loans is much worse as it means less taxes, higher unemployment, higher criminality, ….
In Puerto Rico unemployment claims soared as the island’s economy reels from a ‘Category 5’ hit. Damaged infrastructure = closed hotels = no income more people leave the island = higher unemployment = less taxes… With XENTAVO a country will be able to invest within days and not years.
XENTAVO Digital Cash System
1) Sovereign: the digital cash system is controlled directly by the government and/or Central Bank.
2) Tradable: under the system, all balances are internationally tradable 24 hours a day.
3) Availability: the digital cash system is available 24 hours a day, seven days a week.
4) Secure: the secure digital currency platform is built with cryptographic security, protecting balances even during economic crisis and meltdowns.
5) Scalable: digital frameworks provide great opportunities to scale up access to local and global financial services.
6) Inclusive: digitizing financial systems reduces costs and physical barriers which promotes the expansion of financial inclusion initiatives.
7) Modular: the XENTAVO digital platform is designed to implement existing and new fiscal policy and management applications.
Small States and Cryptocurrency
At the heart of the XENTAVO platform is cryptocurrency, in the form of localcurrency. This cryptocurrency is blockchain based, which provides a digitized, decentralized, public ledger of all cryptocurrency transactions.
Sovereign Cryptocurrency empowers small nations with the ability to conduct know-your-customer and anti-money-laundering procedures, as well as the possibility to transfer money to another account within the system. Furthermore, this innovative platform allows a country to access their funds within minutes.
Think of the ramifications this would have for a small state in the event of a natural disaster, as witnessed in the aftermath of the 2017 hurricane season.
Fully customizable, additional turnkey features can be added to the digital currency platform, to include:
· A module that allows currency exchange
· A module that offers banking capabilities, such as loans based on smart contracts.
· A module that grants access to investments and subsidies.
· And much more.
With the XENTAVO platform the possibilities for assisting small states on their path to independence and sustained growth is possible