September 30, 2023
The currencies we use in the world today are produced from a single central source belonging to each country, and all national currencies are indexed to a currency called the dollar, which is produced from a single central source. There is neither gold nor any other physical commodity behind the dollar; it is entirely a self-contained currency. The value of the dollar exists thanks to the belief of people around the world in the power and military of the United States (USA); beyond that, it has no other objective basis. Therefore, if one day the trust of people in the USA diminishes, or their belief in the strength of the American military or economy is shaken, the value of the dollar will also decline and collapse.
If the scenario of the dollar losing its value mentioned in the first paragraph seems like a distant possibility to you, it means you are not closely following global events. The likelihood of the dollar losing its value and being replaced by another global currency is not insignificant, and this could happen in the not-too-distant future.
The fact that the dollar is not backed by gold and is a self-contained currency (i.e., not backed by any asset) is a piece of information that 90% of people on the street are unaware of and would likely not believe even if told, yet it is entirely true. We have been living with this reality for half a century since 1971. With the changes emerging in today’s global context, the phenomenon known as "de-dollarization," or the dethroning of the dollar, is drawing closer.Last month, six new countries joined the BRICS group, originally composed of five nations led by China and Russia. The number of countries aspiring to join this political and economic bloc, now comprising 11 members, exceeds 20. Meanwhile, the Global 20, or simply G-20—the group of the world’s 20 strongest economies—appears to be cracking. Turkey, amid these significant changes and tectonic shifts, is striving to find its place. Who knows, perhaps in the future, we too might announce our candidacy for BRICS membership.
If the dollar were to be dethroned, the question arises: which currency would become the dominant global currency in its place? The first currency that likely comes to mind is the Chinese yuan, given that China is the world's factory. However, the yuan is also currently pegged to the dollar, so if the dollar were to lose its position, the yuan would not be able to stand on its own either. The Chinese government currently has a debt of 16 trillion dollars in its financial center structure.
What about the ruble? Although the ruble comes from Russia, the largest country geographically and with strong weaponry technology and industry, it is not a currency with the size in population and economy to be a contender for the throne of the dollar. Until recently, it was also pegged to the dollar. However, if the process of decoupling from the dollar that began in mid-2022 is successfully completed, then we could start imagining a new alternative global currency. But at the moment, it's too early. Russia has not yet taken the bold steps to fully break away from the global central banking hub in Basel. However, as the world’s largest commodity exporter, Russia could have been a strong candidate to design a new global currency for our future.
Now that we’re at this point in the discussion, I must share with you my vision for designing a new currency that would be indexed to commodities, particularly metals. I’m thinking of a basket of commodities: oil, natural gas, and wheat as the main items, with gold, silver, and palladium also potentially added. Coal, corn, and fertilizer could also be included, as all of these fall under the category of commodities. Among these, wheat and other grains are of particular importance for our Cropto brand. These can be commercial goods to include in the basket, and particularly, wheat prices are under pressure.Currently, Russia and Ukraine, the world's grain reserves, are at war, and Kazakhstan's wheat also struggles to leave the Caspian basin. Wheat produced in the villages and towns of the Caucasus region is sold at $120 per ton when it reaches the nearest port. However, if you can load the same wheat onto a ship and transport it all the way to Egypt, you’ll find a buyer at $275, including shipping costs. Let's assume the freight cost is $55; this leaves a pure profit margin of $100! It’s clear that Russian farmers are being heavily exploited!
However, if we can establish a regional agricultural cooperative market as part of Cropto’s technological vision for the near future, Turkish farmers, Russian farmers, and Ukrainian peasants could be included in a cryptocurrency-based investment environment. They could free themselves from the exploitation of a few global monopolies. What follows immediately after this could be even more interesting. If the agriculture-based token system we envision can be realized, then a commodity basket upon which new price currencies will be based would also be established. After that, the task would be to include the other 5-6 commodities I mentioned earlier into the system and create new, regional commodity markets within the blockchain environment, offering an alternative to global markets.
I hope that, as Cropto, we can sail towards these horizons. The dream is ours, and it is up to our young people to bring it to life and carry Cropto into the future.
Cemil Şinasi Türün
Chairman of Advisory Board
Cropto - Trademark of AgriFintech Finansal Teknolojiler A.Ş.