Will Catalonia Try to Create Its Own Currency?

Will Catalonia Try to Create Its Own Currency? There has been a great amount of debate in Spain over whether or not the Catalonia region of the country will become its own independent nation. Although the Barcelona government and much of the region want to split off from the rest of Spain, the Madrid government has been aiming to prevent this from occurring.

One concern among currency investors entails not only what will happen if Catalonia splits off but also whether or not the Catalonia government would try and issue its own currency. This comes as Catalonia would exit the Eurozone that Spain is a key part of.

There have been reports that the Catalan government has been discussing a potential replacement currency if the region does become independent. This is similar to what happened a few years earlier where there was a debate over whether or not Greece would leave the EU and if it would produce its own currency as a result.

There is no timeframe as to when such a currency would be set up. This would have to come soon as a timeframe for leaving the rest of the Eurozone would have to be set up. This would include the production of a new fiat currency although one alternative has been explored.

A New Cryptocurrency?

There are reports that the Catalan government has been working with cryptocurrency experts in Estonia on the creation of a new cryptocurrency. The goal would be to create a digital currency that cannot be regulated by the European Central Bank or any other entity in Spain.

This move comes as it might be a challenge to produce a completely new physical fiat currency if the region becomes a separate country. This is especially different from the Brexit situation in that the United Kingdom was never a part of the Eurozone to begin with.

Opponents Have Concern

People who want to see Catalonia stay Spain argue that the exit from the country would result in significant economic worries. This is from not only Catalonia being out of the Eurozone but also from the euro potentially losing its value. In addition, it might be difficult for Catalonia to stay operational as it would immediately lose access to the euro and other euro-related functions in the event of any serious problems.

There are also worries that the development of a new cryptocurrency might be an act of economic self-harm if it were to come about. Although many other digital currencies could be incorporated, all of these options have their own standards for operation. In addition, these are not currencies that the Catalonia government would have control over. This might make it harder for any economic situation to improve in Catalonia.

This development makes for a significant point to look into as Catalonia tries to get out of Spain. The potential for a new cryptocurrency to come out of this could be intriguing to investors. People looking into the situation are anticipating significant changes with the euro in the event that Catalonia does actually become an independent nation.

 

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