Saga Founder: Basket Currency Could Help Prevent Hyperinflation
Ido Sadeh Man, founder of the global stabilized digital currency, Saga, said in a May 15 interview, that a digital currency backed by a basket of strong fiat currencies, together with Bitcoin (BTC), could be the answer to the world economy’s present-day financial hardships and possible hyperinflation.
Money printing isn’t sustainable
Ido thinks that the hyperinflation being brought about by central banks will cause more problems down the road. He stated:
“It is a solution that will bring very undesirable results in the long run.”
However, Ido also said that a basket of currencies would be inherently more resistant to fluctuations.
Ido proposes the SDR, which is a basket of reserve currencies which includes Saga. It comprises the USD, the Euro, the British Pound, the Japanese Yen, and the Chinese Yuan. Ido explained that the SDR is robust against price fluctuations caused by a single currency, and thus capable of reducing risk. He further added:
“When some of the currencies in the SDR are printing money, some of them are not printing money currently and and so again when one will go up the other will go down.”
Bitcoin is the inspiration for basket currency
Bitcoin appeared as a result of the 2008 economic crisis. It was created to oppose arbitrary money policies of central banks. Since then, many digital currencies and technologies have been developed on the ground of the inspiration of its creation. Ido said that Saga is one such project.
Saga’s stated goal is developing a currency which is not dependent on any single national fiscal or monetary agenda. Man argues that such a currency can complement our lives, being able to store and exchange value internationally. According to Ido, Saga’s approach is positioned somewhere between a stablecoin and Bitcoin. He detailed:
“We are adopting the approach as Bitcoin that we cannot control the money supply meaning the Saga protocol does not allow us to print money at any time.”
Ido notes that Saga’s long term vision is to live up to the same principles that are guiding Bitcoin.
CBDC can not solve the problem and prevent hyperinflation
Ido also provided his opinion on the new emerging CBDC. He believes the central bank digital currency is a “tokenized” currency. These digital versions of a national currency are not a true solution for the future of money.
Widespread usage of a CBDC could equate to large numbers of people unwittingly granting unlimited and unrestricted access to data on their economic lives to a central authority. Ido thinks that privacy, custodianship, and financial stability would be the three most challenging features a CBDC would need.
Earlier CryptoTheNews shared a report about the Senate passing a new $485 billion pandemic aid bill to help small businesses and hospitals. A former President of the Bank of China said the digital yuan would finally be able to replace cash. Crypto Valley experts noted that as the macroeconomics has changed, more and more people are turning to Bitcoin as a hedge against the current troubled financial system.