Native American nation using bitcoin-like currency could set precedent

In order to establish its sovereignty and independence and urge its community members to become self-sufficient by understanding the power of money, a Native American nation has produced its very own cryptocurrency modeled after bitcoin named Mazacoin.

The Mazacoin will become the official currency of the Lakota nation’s seven bands. Unfortunately, their plans might be undermined by the government. Chase Iron Eyes, the legal counsel of Lakota in South Dakota, explained to the Verge that many think the government will shut down their monetary initiatives.

‘There hasn’t been a tribal nation that has declared its own currency and has mandated that that currency is used within its borders,” Iron Eyes said. “But it’s because of this pervasive, ever-present asserted dominion of the United States. They’ll try to shut us down, try to cite us with law violations.”

Native AmericanBitcoin remains to be a complicated issue in the U.S., but the Lakota nation has been subjected to poverty for the past century and the “MazaCoin is just spark something to get us out of this cycle of victimhood.”

Although the Lakota bands are creating a currency to become self-reliant, what they might be actually doing is setting a precedent for other Native Americans as well as developing countries with destructive currencies and people that want to establish their own country (akin to Sudan and South Sudan).

All over the globe, there are many countries where governments and central banks have severely diminished the purchasing power of their currencies. A few good examples of this is in states like Zimbabwe, Columbia, Chile, Pakistan and Kenya, where it takes hundreds or thousands of dollars, pesos or rupees to buy anywhere from one cent to one dollar.

For years, the great debate between libertarians has been the concept of competing currencies. We reported in the past of how Friedrich Hayek (Austrian) and Milton Friedman (Chicago) debated over the years of allowing competition in the realm of currencies. Hayek was for it. Friedman opposed it.

Most economists would be on the side of Friedman – though the author of “Free to Choose” became more convinced over the years that competing currencies could work. There has really been no empirical evidence for either side of the debate, but there has been a real-life instance of concurrent currencies: Somalia in the early 1990s.

In 1991, when the nation, government and central bank collapsed, four new currencies entered into circulation: Somaliland Shilling, the Na’ Shilling, the Balweyn I, and the Balweyn II – the Somaliland Shilling became the official currency when the central bank was re-established. The rest of the currencies were unstable, inflationary and only used by certain clans.

Historians agree that Friedman was right, at least in terms of Somalia. However, experts still say that empirical analysis does not conclude the Hayek-Friedman currency debate.

Now, years later, with the rise of cryptocurrencies and the adoption of a brand new Mazacoin by the Lakota nation, could digital currencies restart economies in all corners of the world? Although it’s unlikely that the U.S., Canada, Great Britain, Australia or China will abolish their respective currency in favor of bitcoin, litecoin or dogecoin, could other countries, predominantly in Central America, Africa and Asia, adopt one of the 300 cryptocurrencies or even produce their own? It’s possible.

This is why it could be quite important to monitor the Mazacoin.