Wales to Launch a Digital Currency for SMEs

Wilfred Michael 

Wilfred Michael

News reporter

15 October 2019,
13:45
Wales to Launch a Digital Currency for SMEs

With talks of digital currency issuance making the rounds in different countries, British country, Wales, looks all but set to try their version, which according to a Business Cloud report, would focus on small and medium-sized enterprises (SMEs).

The planned digital currency will reportedly form the basis of a new mutual credit system that would allow businesses in the country to exchange goods and services without relying on traditional payment channels.

Dubbed the Celyn Mutual Credit System, and copied from an existing model in the Italian region, Sardinia, the Welsh government believes that the new system could save the SME sectors as much as £250 million ($316 million) within the next decade.

To this end, the country awarded Circular Economy Wales (a community interest company) the sum of £100,000 from the state’s £4m Foundational Economy Challenge Fund to develop the digital currency-based system.

Commenting on the development, Eifion Williams, CEO of Circular Economy Wales reportedly said,

“The Sardex benefited the Sardinian SME economy to the tune of 50m euros last year alone. Wales is similar to Sardinia in that SMEs make up 99 percent of our businesses, so this has the potential to significantly boost our economy.”

The CEO further speculated that if Wales had initiated a copy of the Sardex in 2008, and it had followed the same growth trajectory, Welsh SMEs would now be strengthened to the tune of £256m in additional turnover.”

To be clear, the proposed system may not necessarily imbibe the idea of a cryptocurrency since the Sardex system was reportedly introduced in the wake of the 2008 global crisis, to allow businesses to carry out their activities without running short of cash.

The digital currency, which also exists only on the internet, is acceptable within a particular region approved by the government, unlike cryptocurrencies that seek global adoption. There is also the possibility that the digital currency won't be issued on the blockchain.

 

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