The FiNANCiAL — As the new era of technologies has paved the way for the money digitalization process, cryptocurrency has emerged as one of the most promising financial breakthroughs of the 21st century.
In August 2017 AISI COIN was established as the first Georgian cryptocurrency, with the emission of 250 million coins.
The FINANCIAL interviewed the founder of AISI COIN, Giorgi Shervashidze, where in a barrage of questions we covered both the fundamental and specific topics concerning cryptocurrency and its role in developing the Georgian economy.
Q. In what ways has Georgia caught up with the general development of cryptocurrency on a global scale?
A. Well, in my mind there are things that our government has done quite well. Georgia has been the first country in the whole world to announce public registry transactions via Blockchain, (the integrated secured bundle of payments that are trackable at every stage of a transaction).
However, there are follow-up steps that I would like to have seen taken towards further development. It would have been amazing if the Government integrated smart contracts in the public registry. Nowadays the system, in my mind, is outdated. When a buyer wants to purchase and register a piece of real estate, the process usually lasts days. Both parties (buyer and seller) have to expend a lot of effort to avoid misunderstanding.
Smart contracts solve the problem with ease. Once the terms are agreed by both parties, an algorithm transfers digitalized money in cryptocurrency to the recipient.
Q. Why is the development of cryptocurrency essential?
A. The reason why the development of cryptocurrency is so crucial lies in the concept of cryptocurrency itself. Emission is prohibited. The idea is that once a certain amount of cryptocurrency has been created, its additional emission is prohibited. This is great for numerous reasons, one of which is obviously no risk of inflation.
To specify further, there are two types of cryptocurrencies – coins and tokens. Coins are just currencies which have a certain exchange value. On the other hand, tokens are emitted by companies and carry a certain value of the shares of a company.
Crypto tokens enable companies’ out funding, (out funding is currently only available for a physical person, any sort of out funding for companies is prohibited by Georgian law), which is something I believe our government should really focus on incentivizing.
Companies as jurisdictional entities are well protected by laws and enable both parties (potential shareholder and the company management team) to conduct a more productive business partnership.
Imagine if these token emissions were regulated in exchange for the Georgian Lari, demand would increase and therefore the GEL would appreciate in value.
Q. Do you see the necessity for the National Bank to emit cryptocurrency?
A. Personally, I do not feel very supportive of that idea. The whole beauty is in the decentralization that cryptocurrency provides, when government-based organizations such as the National Bank are involved in the process, the sector would probably see some regulations that go against the whole concept of cryptocurrency.
In my opinion, the only role the National Bank should have, is to come up with several defensive mechanisms to defend the equity of investors.
Q. Do you see ways that the National Bank can regulate the sector?
A. I really do not see many ways. Cryptocurrency is connected to Blockchain; the transactions are trackable, the accounts are visible, my currency is on stock for purchase on the world wide web.
Again, the only intervention I would love to see from the National Bank would be to establish some sort of ethics for trading, and currency exchange in order to create a healthy financial environment.
Q. Can cryptocurrency users take out loans without the involvement of any financial intermediary?
A. The liquidity of cryptocurrency enables that precisely, and in a much more efficient way than people are used to. The primary function of a bank is to gather around lenders and borrowers anyway, and in the process they take their commission.
An online ecosystem created by our cryptocurrency enables both borrowers and lenders to choose the terms that they find appealing.
The only thing that needs to be created is regulation for interactions with the help of a smart contract. In the event a contract is broken, or the money is not given back, the lender should have compensation with some sort of asset estimated at the value in which money was borrowed (every term will be written in a contract in advance).
Q. How would you describe the business portfolio of AISI COIN and its potential for development?
A. The concept of cryptocurrency surrounds so many fields, that potential for development truly has no boundaries.
Our team genuinely believes that the aim of any company should be to create something truly valuable to mankind.
We would really love to see some sort of ecosystem, where similar to Kickstarter, many start-up companies emit their crypto tokens and seek out investors globally. This investment process is taken to a whole new level, where in just a matter of seconds anybody can get shares of presented Georgian start-up companies on a global scale.
Each company will have its individual tokens, and the single currency of purchase will be AISI COIN of course.
This is one of the main purposes of AISI COIN and we would really love to see more supportive steps taken from our government in order to accelerate the creation of such an ecosystem.
Currently, we operate on 5 stock markets globally, with 15 locations on the Georgian market and 2 on the Latvian market.
The future is bright, and we are looking forward to putting Georgia on the map.
By Gela Megeneishvili