Electronic Monetary system
Posted: Tue Mar 29, 2016 5:18 pmToday oil price was around $38.00/barrel. The probability that the oil price will remain under $40.00/barrel for a long time in future, is very high. This is because of the recession in China. It was the Chinese economic boom, which created a high demand on oil, led the oil price to jump over $100.00/barrel. But today China is in recessions and recessions last years.
The implication of this low oil price is too bad for Kurdistan and it is a threat bigger than the threat of ISIS. So what is the solution? The solution is simple, KRG need to seek an alternative solution without depending on oil revenue. Money is money, it does not make any difference where it comes. It could be the value of oil price or the value of work and services provided. Gold or hard currency reserves used to support local currency is nothing more than something in mind. Legally tendered money doesn't have support in gold or hard currency.
KRG can use the services and works provided to the authority, KRG, by every one from a simple clerk to a Peshmerga and legislator to create a legal tender money, as the value of their works and services, to pay their wages. In this situation KRG doesn't have to print any money, instead it can create an electronic monetary system to pay every one electronically.
This electronic monetary system necessitates every one, receives a wage from KRG, to have a bank account and a debit card. To prevent any one getting multiple accounts and debit cards to get multiple wages, each debit card holder uses both thump print signatures on electronic thump print signature reader to use his or her debit card. At the end of each month, KRG electronically credits each account with the wage of account holder.
An account holder uses his or her debit card to spend his or her money and draw cash from his or her account. There must be billions of paper money now circulating in Kurdistan. One way to ensure there is always cash available in banks KRG can encourage people to deposit all their savings in banks as well as creating an inter banking financial market. Should a bank becomes short of cash because of withdrawals on electronic accounts this bank can borrow money from another bank or financial body and charges an interest from KRG to recover borrowing cost and make a percentage profit.
I am sure this electronic monetary system revives Kurdistan economy and removes internal security threat.
The implication of this low oil price is too bad for Kurdistan and it is a threat bigger than the threat of ISIS. So what is the solution? The solution is simple, KRG need to seek an alternative solution without depending on oil revenue. Money is money, it does not make any difference where it comes. It could be the value of oil price or the value of work and services provided. Gold or hard currency reserves used to support local currency is nothing more than something in mind. Legally tendered money doesn't have support in gold or hard currency.
KRG can use the services and works provided to the authority, KRG, by every one from a simple clerk to a Peshmerga and legislator to create a legal tender money, as the value of their works and services, to pay their wages. In this situation KRG doesn't have to print any money, instead it can create an electronic monetary system to pay every one electronically.
This electronic monetary system necessitates every one, receives a wage from KRG, to have a bank account and a debit card. To prevent any one getting multiple accounts and debit cards to get multiple wages, each debit card holder uses both thump print signatures on electronic thump print signature reader to use his or her debit card. At the end of each month, KRG electronically credits each account with the wage of account holder.
An account holder uses his or her debit card to spend his or her money and draw cash from his or her account. There must be billions of paper money now circulating in Kurdistan. One way to ensure there is always cash available in banks KRG can encourage people to deposit all their savings in banks as well as creating an inter banking financial market. Should a bank becomes short of cash because of withdrawals on electronic accounts this bank can borrow money from another bank or financial body and charges an interest from KRG to recover borrowing cost and make a percentage profit.
I am sure this electronic monetary system revives Kurdistan economy and removes internal security threat.
