Last week Panasonic announced a project to explore using the DCJPY digital currency for tourist passes. DCJPY is the tokenized deposit initiative backed by Japan’s largest firms, which plans to launch in mid 2024. The core of the experiment will involve sightseeing passes that allow tourists unlimited travel on trains and buses for a fixed fee, plus discounts at stores, restaurants and other recreation destinations. The goal is to divide the proceeds of the tourist’s payment using smart contracts.

Other project participants will include DeCurret, the company behind DCJPY; au Financial, a subsidiary of KDDI Telecom (a top 20 Japanese company by market cap); IT consultancy TIS; and SocioFuture.

Using smart contracts for tourist passes

Two key scenarios to be tested are dividing the sightseeing payment and rewarding someone who refers the tourist. Like any typical sightseeing pass, there’s a fixed payment for an unpredictable amount of travel. At a technical level, the tourist pass is a non fungible token (NFT).

If a tourist buys a sightseeing pass and doesn’t travel that much, the amount they pay might exceed the cost of the travel. In that scenario, the smart contract will calculate how much to pay each transport company and grant points to the tourist so they can use the points towards discounts during their holiday in the local area.

A second scenario involves the tourist doing quite a bit of travel, so the sight seeing pass is more than used. The smart contract then calculates how much to pay each transport company on a pro rata basis, and pays thems. This significantly reduces the amount of administration necessary and the transport companies receive the money faster. Additionally, if the tourist buys the sightseeing pass as a result of a referral, the introducer will automatically receive a reward.

DCJPY readies for launch

Meanwhile, DCJPY is gearing up to launch soon. It grew out of the Digital Currency Forum, a collaboration involving many of Japan’s largest banks and companies. Despite the the fact that DeCurret’s investors include MUFG and SMBC, and the involvement of Japan’s big four banks in the Digitial Currency Forum, the first bank to confirm a concret use case is GMO Aozora Net Bank.

Given banks will participate in the DCJPY infrastructure, security is paramount. To reduce the risk of a rogue smart contract impacting the banks, the network is divided into a Financial Zone where the tokenized money lives and multiple Business Zones where firms can deploy smart contracts such as the tourist pass.

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As the US economy shows signs of degradation with rising US debt metrics in the mix, the US dollar is bearing the implications of it all. The USD is now being dubbed a currency slowly inching towards its demise. With countries ready to gnaw at the US dollar’s reserve currency status, the American currency is now scouring in a volatile arena, with its competitors closing in hard and fast.

Despite the plummeting data numbers and metrics, financial giant Morgan Stanley has backed the US dollar. The institution’s financial strategists are of the view that the USD is hard to outpace. The experts have stressed how the USD’s so-called “alternatives” will never get ahead of it, irrespective of changing economic narratives.

With Bitcoin touching new price highs, the discussions surrounding BTC replacing the US dollar have gained incredible traction in recent times. The US dollar has lost nearly 95% of its purchasing value since the 1970s, while BTC has always gained its valuation through consistent efforts and determination.

Such parallels have given birth to a phenomenon where US dollar alternatives have come up in the narrative. These alternatives are possibly assets or investments that help an investor secure stable returns, which the US dollar is not able to disseminate as of late due to its volatile nature and weakening economic statistics.

Cryptocurrency, or Bitcoin, has often been dubbed an equal competitor to the US dollar, with multiple experts often portraying BTC as an alternative to the USD.

However, experts at Morgan Stanley are presenting a new outlook, backing the US dollar’s legitimacy. David Adams, Morgan Stanley’s head of G10 FX strategy, shared how Bitcoin is too volatile to be considered a true replacement for the US dollar.

“If I’m holding a crypto coin that rises, say, 10% a month, I’m less likely to use that for trading. Instead just hoard it in my wallet to benefit from its price appreciation. Now, reasonable people can disagree about whether cryptocurrencies are going to appreciate or depreciate. But I’d argue that the best outcome for a dominant currency is neither.”

The experts later reiterated how it takes a considerable amount of time, possibly decades, for people to acknowledge a currency’s true legitimate status. Bitcoin being the newest frontrunner in the space may not accurately be dubbed a “haven” for investors in the long run.

Fallen Fortunes: USD’s Demise?

The US economy is presently suffering through a crackdown. The rising US debt numbers put more pressure on the US, triggering the US dollar to spiral further down.

Per Zerohedge, the inflation that has gripped America has not dipped after 2021. As a result, the US economy is now experiencing a whopping surge in its overall prices, a hike of nearly 19.4% in less than 4 years.

“Inflation has not fallen in a single month since January 2021, according to Zerohedge. This means that overall prices are up over 19.5% in less than 4 years. That is an average of 5.5% per year, effectively wiping out one-fifth of the US dollar’s purchasing power. We have not had a year-over-year inflation print below 3% in 37 consecutive months. Inflation is now building on previous years of inflation; we effectively have compounding inflation. How is this a “strong” economy?”

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Amid the bloc’s continued de-dollarization plans, officials have confirmed that a BRICS currency is currently in development. Iran’s ambassador to Russia, Kazem Jalali, recently stated that both Russia and Iran were collaborating on the project, according to a TASS report.

Additionally, Jalali said that diplomatic relations between Russia and Iran are currently in the midst of a “golden age.” The latter joined the economic alliance as part of its inaugural expansion effort at the bloc’s 2023 annual summit, becoming one of five nations to join the expanded BRICS.

BRICS Currency Officially in Development

Over the last year, the BRICS economic alliance has formulated a comprehensive strategy to implement a multipolar world. Indeed, it has continued to embrace competition with the West as it seeks increased de-dollarization policies. Now, the bloc may be in the midst of formulating the US dollar’s greatest challenger year.

The BRICS alliance has confirmed that a native currency is officially in development, according to a TASS report. Specifically, the Iranian ambassador to Russia, Kazem Jalali, discussed the work of both Russia and Iran in bringing the project to fruition.

“The creation of a new single currency within the framework of the association is what Russia and Iran are working on,” the official stated. Moreover, he noted that “more than 60% of bilateral trade” between the countries is settled in either rubles or rials. Thus, strengthening the overall flourishment of the local currency promotion within unilateral BRICS trade.

The plan will only continue to create a more diversified global economy. Although the United States dollar enjoys unprecedented dominance, that has significantly lessened over the last year. In 2023, reports note that one-fifth of all oil trades were made in other local currencies.

The greenback will only face increased opposition through the implementation of another widely used global currency. It is no secret that nations across the globe are seeking dollar alternatives. That is clearly seen in the gold rush that central banks throughout the world have been enthralled by throughout this year.

The creation of a BRICS currency will give many of these countries another option for global trade. With the alliance growing every year, it will only increase the number of nations that are completing cross-border transactions with the currency. Ultimately, this should further the bloc’s de-dollarization efforts to greater effect.

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