Cryptocurrency was invented specifically to be a decentralized form of currency, independent of banks and their underhanded trickery, as well as governments and their neverending desire to tax you into oblivion.

So, the idea of a national cryptocurrency seems like an inherent oxymoron. Wouldn't it defeat the whole purpose of cryptocurrency? Not necessarily.

A government-issued cryptocurrency needs not to compete with the likes of Bitcoin, Litecoin, Dogecoin or Etherum. That's a fruitless endeavour - people generally consider government-provided alternatives to anything to be "cringe" and "lame".

Instead, a government-issued cryptocurrency ought to be a stablecoin similar to USDT. Because I'm Hungarian, let's call it HunCoin, and peg it to the Hungarian forint. Assuming that you are not Hungarian, just mentally replace the Hungarian forint with your own country's national currency.

What kind of purpose would such a currency serve? Well, what kind of purpose does USDT serve? Enter the Hungarian National Cryptocurrency Exchange.

A National Cryptocurrency Exchange?

What kind of purpose does USDT serve? It serves basically one purpose: as a base unit of exchange on cryptocurrency exchanges. On Probit, the main unit of exchange of USDT - you can sell your cryptocurrencies for USDT, you can buy your cryptocurrencies using USDT, and the net worth of all your combined cryptocurrency wallets is measured in USDT. Likewise, this Hungarian National Cryptocurrency Exchange would function the same, just with HunCoin instead of USDT (and obviously, would allow users to buy HunCoins using Hungarian Forints, and sell their HunCoins for Hungarian Forints).

The main advantage of such an institution would be trustability - while I personally don't trust the government (as I am very anti-statist), many people do, and would likely be far more enticed to get into cryptocurrency, if a government institution promised to protect their wallets, rather than a private company that can go bankrupt and defunct any time.

The third important feature of such an institution would be loans and debts. Arguably, one of the major weaknesses of cryptocurrency - an inherent disadvantage of its decentralization, I would say - is the lack of in-built support loaning cryptocurrency and handling debts in cryptocurrency. If you loan someone a given amount of sh!tcoins, there is no guarantee that they'll give them back to you - and what are you going to do if they don't? Call the police? Ha! Better hire a bitcoin assassin!

Thus, it would be imperative, that the Hungarian National Cryptocurrency Exchange would support this feature (albeit only for Hungarian citizens with Hungarian residence, as we cannot enforce it on foreigners), and enforce debts, albeit with one major twist: when you'd loan someone, say, 100 Dogecoins (at the time of writing this article, a single dogecoin costs 115 Hungarian Forints, and if HunCoins are pegged to Hungarian Forints, we'll assume that the rate of exchange is 1 Dogecoin to 115 HunCoins), what they'll actually owe you won't be 100 Dogecoins plus interest, but rather 11500 HunCoins plus interest (albeit, you'll still be expected to pay it back in Dogecoins). Albeit this would make the shorting of cryptocurrency impossible, it would be straight-up ridiculous to expect people to settle their debts in currencies as volatile as the typical cryptocurrency.

The fourth feature of this system would be this: at any place that accepts HunCoins as payment, the system would allow you to pay with any cryptocurrency that can be exchanged to and from HunCoins, automatically exchanging at the market price. Say, you want to buy a car that costs 10 million HunCoins, but you have no HunCoins? No problem - if you have 86 957 Dogecoins in your wallet, they'll automatically get exchanged for the 10 million HunCoins (assuming an exchange rate of 115 HunCoins for each Dogecoin). Naturally, the Hungarian government would have to go out of its way to actively encourage the acceptance of HunCoins as an alternative to both cash and credit cards.

But what kind of benefits would it entail to the parties?

The government would obviously pocket all the transaction fees. If the transaction fee - or tax - was kept to a reasonable minimum, people would be enticed to use it.

This system would provide a bridge between the regulated world of government monetary politics and the unregulated world of cryptocurrency. It would encourage the spread of cryptocurrency by encouraging its usage.

This kind of system would encourage foreign investment as well, as foreigners would be able to just come here and shop in Hungary using their bitcoins, and other cryptocurrencies that can be exchanged to and from HunCoins.

On a somewhat more unethical side of things (granted, ever since I became a wageslave, I stopped caring about ethics and morals), if the Hungarian government took lessons from the Swiss, foreigners would be able to launder their money using this Hungarian system, which would obviously generate revenue for the Hungarian government.

Last but not least, this system would strengthen the Hungarian Forint as well: if the system was succesfull, there would be a high demand for HunCoins, and since HunCoins are pegged to the Hungarian Forint, this would allow the HNC to drag the HUF up with it.

But what would it take?

First of all, it would require a political will. The current Hungarian government is made up of technologically illiterate boomers, so, they're never going to implement my idea. However, a hypothetical libertarian party (which doesn't exist in Hungary) - especially one more tolerant towards the grey market, even the black market - could definitely implement the idea.

Second of all, it requires a non-greedy government, that won't put an unreasonable amount of transaction fee on the cryptocurrency. If they put a 27% tax on every single HunCoin transaction, no one is ever going to use it.

Third, it requires a bit of an up-front investment: lots of Hungarian Forints need to be allocated to make sure that HNC and HUF can be exchanged for each other (this could be mitigated by heavily encouraging the usage of HunCoins instead of Forints, and accepting them for paying taxes and paying for government services), and the Hungarian State Treasury will also have to buy up vast quantities of bitcoins and other cryptocurrencies to be able to have an initial stockpile to sell to citizens - either that, or invite people to move their crypto to the exchange wallets and sell some for HunCoins.

However, under a wiser government - wiser than the current Hungarian government - the system would work, and turn Hungary into the Switzerland of cryptocurrency.

This kind of system, would let both the government and us cryptocurrency-loving libertarians have our cake and eat it at the same time. If any government in the world implemented my idea, it could be the next step in an evolution of digital economics.