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Brian Brooks, the main US banking regulator, has an idea to help close the wealth gap between developing and developed countries. He calls the concept “the country’s coin”.
What the generic proposition lacks in an eye-catching branding, it makes up for in substance. The heart of the plan is to promote education and economic growth around the world, says Brooks, the acting U.S. currency controller. As higher literacy rates correlate with higher “gross domestic product”, getting people to stay in school could boost productivity, individual well-being and societal prosperity, he says.
Such principles from wealth to wealth are well established in the academic literature, although their implementation is slow in practice. (Just ask the world Bank economists.) But it’s the nature of Brooks’ particular incentive system that might sound wacky. The ideal incentive? Cryptocurrency tokens, he says.
As part of this plan, world governments rewarded people with so-called country coins for lifelong learning. A student earns coins by taking online courses and passing tests. The coins would essentially represent claims on a “trust fund” set up by the State; they would entitle beneficiaries to future payments representing a share of the increase in tax revenue generated by the increase in GDP.
Translation: As people become more educated, nations, coin earning students, and investors get richer together. Cryptocurrency guarantees benefits for everyone, rather than just people who get good wages in the workforce after completing their education.
“It’s a way to increase equity and increase growth without raising taxes and pitting the rich against the poor,” says Brooks.
Brooks pitched the idea to the Singapore Fintech Festival December 9. Not embarrassed by his own opinion on the plan, Brooks said, “I’m telling you it should be the next Nobel Prize. It’s a great idea. He compared the potential impact of the proposal to that Muhammad Yunus, founder of the Grameen Bank of Bangladesh, whose pioneering work on reducing poverty through microcredit won him a Nobel Peace Prize in 1996.
Brooks highlighted Afghanistan, Southeast Asia, and Latin America as some of the more mature places where a country’s currency could have the greatest impact. “There is no technological reason that it cannot happen right away,” he said.
What is needed is for regulators to “recognize this as a relatively light, hands-off, non-us-against-them policy approach to allow everyone to get rich together, which the developing world should wish, ”Brooks continued.
Bryan Hubbard, Brooks’ deputy comptroller of public affairs, shared an exclusive sneak peek at a report his team plans to release that details the country’s coin proposal. Brooks co-authored the article with two former colleagues at Coinbase, America’s largest cryptocurrency exchange, where he was previously chief legal officer.
“In fact, the coins are becoming a near-stake in the country because they represent a prediction of future cash flow growth,” says the newspaper, whose co-authors include Hermine Wong, Coinbase Chief of Staff for Confidence. and risk, and Amy M. Luo, Coinbase Senior Advisor for Global Business Development and “stable coinsA type of cryptocurrency designed to maintain consistent value.
An organization chart found in the “country corner” paper describing an economic “flying effect” this could be the result of the link between education and equity in the world.
In practice, this means that a Colombian student could take virtual classes using a mobile phone and receive, as compensation, Colombian coins from the country’s finance ministry. If the coins are worth $ 10 apiece at the time of disbursement, then earning 100 coins would earn $ 1000 immediately. Assuming that Colombia’s GDP and tax base increases over time, the price of coins is also expected to increase, which would gain more for recipients.
“A virtuous flywheel cycle is created in which the more students learn, the more valuable coins become, and the demand for coins (and therefore their value) increases as more and more students follow. education courses, ”the newspaper said. The proposal addresses socio-economic inequalities “in a way that traditional tax policy does not have,” the abstract states.
Universal basic instruction
The idea can be seen as a kind of universal basic income– with a twist.
Instead of handing out a fixed amount of money to people just because they are tax-paying citizens, the country’s coin would reward the people who study and learn the most. These are, after all, the very ones that directly improve national outcomes for health, livelihoods, social stability and GDP.
The discipline chosen does not matter; whether someone is studying AI programming or postmodern literary theory makes little difference. “GDP growth is affected by philosophy professors, no less than by software engineers,” says Brooks. “The beauty of this approach is that job markets can always treat you differently, but everyone shares in the creation of national wealth. We are all together. “
Some countries are already experimenting with forms of universal basic income. The tests have occurred in Brazil, Kenya, Switzerland and Finland, as well as U.S. states such as Alaska and California. In the United States, the idea gained popularity after former Democratic presidential candidate Andrew Yang adopted it as part of its campaign platform. Cryptocurrencies have been offers for the purpose too.
Controller of (Crypto-) currency
Brooks has rocked the Office of the Comptroller of the Currency since joining earlier this year. The characteristics of its mandate include grant more bank charters at financial technology, or fintech, startups, supporting vocally cryptocurrency innovation., and leading to political controversy Rule of “fair access” to banking services.
Some members of the progressive wing of the Democratic Party have criticized Brooks for devoting, they say, too much time and attention to the cryptocurrency industry. On the other hand, he was applauded by the private sector for its regulatory approach, in particular by specifying that banks are authorized to hold deposits backed by stable coins.
Brooks, former general counsel for the mortgage giant Fannie Mae, is awaiting a confirmation hearing for a possible five-year term as the country’s main banking regulator following his appointment by President Trump to the interim post in May. If Brooks is confirmed, President-elect Joe Biden could – and, in fact, very well could – remove him from the role to install a more hawkish regulator of his choosing.
“Finance can be a force for real change and real good in the world,” says Brooks. “Creating a country coin without permission in countries that are on a growth trajectory from developing to developed status is one of the biggest ideas in finance today.”
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