Throughout history, money has existed in many different forms. It has evolved from gold to paper to plastic, and now, it’s digital too. Not only has the physical shape of money changed, but there’s also been a significant shift in who issues it and decides its value.

Bitcoin introduced the world to decentralized digital currency and opened the door to an entirely new asset class. It proved that people could create and sustain a global currency with very little government interference. It also exposed the world to the benefits of blockchain technology in transferring wealth around the world safely, securely, and quickly.

As the interest in Bitcoin and crypto has risen, businesses and even governments are starting to create their own blockchain-based currencies. What's the difference and which type of currency is superior? Let's take a look.

Government-backed Digital Currencies:

Several countries around the world, including China, have issued or are actively developing their own digital currencies. Most of these are stable-coins, a digital representation of the existing national currency valued by a mix of exchange rates, treasury notes, and foreign exchange reserves.

Other countries, like Venezuela, have pegged the value of their digital currency to natural resources. The Petro, for example, is backed by Venezuela’s oil, gas, gold, and diamond reserves.

Corporation-backed Digital Currencies:

The global surge in government-backed cryptocurrencies has likely been amplified by Facebook. In June, the social media giant announced its plans to launch Libra, a digital currency issued by a non-profit foundation made up of 100+ companies around the globe. According to the organization, Libra’s value will be pegged to a variety of stable assets, including bank deposits and government securities in currencies from stable and reputable central banks.

Libra has faced intense scrutiny from global leaders. Just this week, U.S. Senators issued letters of warnings to participants, causing Paypal, Mastercard, and Visa to drop out of the foundation.

Bitcoin, Libra, or National Digital Currencies?

Whether Libra sees the light of day or not, the mere idea of it shows the changing form of money and, ultimately, the resilience of decentralized currencies.

Bitcoin, Libra, and government-backed digital currencies can likely peacefully co-exist, giving people options to diversify their wealth and transact more securely and efficiently than ever before. The biggest losers will be those who don't evolve to meet the demands of an increasingly digital global economy.

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