It has been a rough decade for Iceland. Between the crash of three major banks to the prime minister’s resignation over corruption revealed by the Panama Papers, the insular island nation has experienced a heavy dose of failure in its most essential systems of governance. This curse, however, could turn into a blessing, as Iceland is uniquely positioned to take full advantage of cryptocurrency like no other nation.
Two major upheavals in a decade
Back in 2008, Iceland’s three major banks collapsed, ushering in a corresponding economic collapse and prompting the heads of said banks to be jailed.
In the country where common folks were forced to still use the failing króna and you need a permission to buy foreign currency for your holiday plane ticket, the revelation came that their prime minister had finances in offshore accounts. No wonder it has reopened fresh wounds from barely eight years earlier.
As a result, the relatively new and radical Pirate Party has already taken the lead in Iceland’s polls.
The failure of banks and regulators
Rather than a tale of corruption, outrage, and justice, however, what Iceland’s struggles really underscore is the complete failure of central banking and capital controls, illuminated intimately as only possible in a small island nation of barely 300,000. And, regrettably, the government appears to be doubling down on its mistakes.
Not only were the three bankers who were jailed in response to the 2008 collapse recently released from jail after serving only a fraction of their sentences, incoming Prime Minister Sigurður Ingi Jóhannsson supports legislation banning Iceland’s citizens from keeping their money abroad in tax havens.
Instead of learning from the errors of the past, Icelandic officials seem hell-bent on repeating them.
Auroracoin’s rise, fall, and rebirth
As a solution to the banking system and the devalued króna, an anonymous development team created Auroracoin, a cryptocurrency meant specifically for the people of Iceland, and was distributed to them directly.
The initial distribution saw a price spike and crash, caused by the collision of a swell of anticipation with an inadequate infrastructure for using and trading the cryptocurrency. The Auroracoin Foundation, however, plans a resurgence for the coin this year, as its price and transaction volume continue to spike in response to the country’s recent financial woes.
A unique opportunity to embrace cryptocurrency
The troubles the people of Iceland have had to endure at the hands of a government completely unresponsive to real change could end up working in their favor.
National cryptocurrencies provide a meaningful alternative to the central banking system, allow a people to gather equity instead of debt, and have a more focused distribution model than general purpose cryptocurrencies such as Bitcoin.
Since 10% of Iceland’s population already holds Auroracoin, an opportunity for a whole nation to embrace cryptocurrency has never been easier to grasp. Whether or not its people seize this unique chance remains to be seen.