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Ask HN: Should we create a Crypto Bank that issues bank notes?

2 points by Findeton ↗ HN
Some people have created "bills" and physical "coins" that actually contain crypto. I haven't seen anyone creating bank notes that are simply backed by a bank that stores the crypto for them. What do you think about the idea?

I believe it could be useful for people in some developing countries. My initial idea is to create a branch in Colombia/Cucuta, oriented to support people from Venezuela crossing the border forth and back.

Pros about such a bank:

- Crypto bank notes enable off-chain transactions with zero cost.

- Bills/notes enable use non-gov backed currency (may fluctuate, but won't have inflation) without requiring internet.

- A "current" crypto bank account also enables you to forget about taking care of the security side of crypto addresses, where it's also easy to move money to an Ethereum address or back to other currencies like colombian pesos or dollars.

What do you think?

PD: I'm based in Europe, but I've been to Colombia.

3 comments

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gus_massa
[Hi from Argentina!]

How do you prevent counterfeit? Bank notes have a lot of security measures and the government will send to hail anyone that tries to make a fake bill.

How is this better than dollar bills?

Findeton
A dollar still has inflation. Counterfeits are an issue though there are well known mitigation approaches. Honestly it’s not that different from a dollar, it’s just something that I haven’t seen anyone testing it.
gus_massa
The inflation rate in Venezuela is more than 200% monthly. (!!!) That makes it very difficult to deal with the money and essentially worthless for anyone outside Venezuela.

Using dollars that has only an inflation rate of 1-2% annually would be a huge difference.

You are underestimating counterfeits. Here in Argentina we had 20 years ago some "barter clubs", it was like a local market but people use a fake internal money instead of the national money. It was like a local/neighborhood money backed by thin air. It worked for some time, until some of them were popular enough to get counterfeits attacks.