The notion of California forging a controversial ‘Calexit’ from US governmental control might seem like whimsical thinking, but could the would-be state-turned-country’s proposed reliance on cryptocurrencies to supply free healthcare and provide Universal Basic Income has shone a light on how crypto bring stability for the poorest members of society. 

The movement, called Yes California, claims the government of California has agreed to hold a public petition on ‘Calexit’ this year, with 2024 earmarked as a date for a possible referendum

But what’s most intriguing is Yes California’s plans on how to develop a cryptocurrency-driven economy that’s designed to democratise the state’s resources, land and assets. 

Cryptocurrencies to Drive Economic Liberty

Driving Yes California’s self-sustained cryptocurrency ambitions is Scottish blockchain expert and Ziyen Energy head Alasdair Caithness. With the fifth-largest economy in the world, and a population of around 40 million citizens, California’s cryptocurrency-based economy would be the largest and most ambitious of its kind in the world. The devised plan to utilise crypto to deliver basic services is fundamentally revolutionary, but Caithness remains a firm believer in the power of utilising digital assets to bring about a much fairer financial landscape for citizens.

“The policy will involve developing a blockchain-backed cryptocurrency,” Caithness explained. “This will democratise ownership of the California Government’s land, resources and assets through tokenisation into a usable currency.”

“It is the intention for it to be used to finance a level of free healthcare, free education and a form of basic income for all California citizens who have struggled to achieve economic liberty under the current US Federal Government system,” Caithness explained. 

In the jargon-rich world of cryptocurrencies, tokenisation refers to converting a physical asset, such as land, into a digital asset

In essence, this would mean that instead of investors buying a piece of land in California, it would instead be divided into hundreds of parts, and people could own or trade land by exchanging its value in the form of digital coins instead. 

Such transactions could only be facilitated through the use of customised cryptocurrencies that are specifically designed for the trading of assets. These may be fuelled by non-KYC crypto exchanges like Evonax or Binance, or through a specially developed national exchange that can adapt to the new and ambitious purpose of specially designed crypto assets. 

It’s claimed by Yes California that allowing citizens to invest in both land and property in a compartmental manner could help to raise masses of funds that could ultimately go into implementing community-centric causes like free healthcare, free education, and Universal Basic Income for residents. 

The Political Pipedream

While the notion of a cryptocurrency-driven nation would be tantalising to see in action, the fact remains that ‘Calexit’ is a highly unlikely prospect. 

According to a poll conducted in 2017, the vast majority of voters in the state of California would prefer to stay as part of the United States. As much as 68% of voters expressed a desire to remain within the US while 32% favoured the notion of independence. 

While the news that California is likely to remain a part of the United States for the foreseeable future is unsurprising, the would-be nation could’ve represented a driving force in the wider adoption of digital finance as a means of replacing fiat currencies. 

With 40 million citizens, California would’ve been capable of demonstrating the largest road test to date for a society driven by cryptocurrencies. Furthermore, the use of crypto assets to offer citizens land and utilising tokenisation to provide vital access to free education and healthcare could’ve provided other nations with an early insight into using digital currencies to create equal opportunities for all citizens. 

However, for all of the innovation that ‘Calexit’ promises, it wouldn’t stand alone as the first large-scale crypto-driven project. 

Piggybacking on Existing Initiatives

For a decade Venezuela has suffered from hyperinflation, and in a bid to stem the financial hardship facing the country, President Nicolas Maduro decided to create a brand new national cryptocurrency, called Petro

Petro is a cryptocurrency that’s designed to retain a consistent value by remaining pegged to the price of oil, hence its name. This, theoretically, means that Venezuela has a well-priced stablecoin that has the potential to take over from the nation’s ailing fiat currency, the Venezuelan Bolivar. 

President Maduro’s determination to implement the Petro into daily life has seen Venezuela announce recently that tax will be taken out in the cryptocurrency in a bid to encourage wider adoption. 

Despite the arrival of Petro an ambitious and innovative attempt by Venezuela to confront its national financial crisis, the move has been punctuated by controversy, with countries like the US refusing to acknowledge or allow transactions with the cryptocurrency. 

However, there’s little doubting that the Yes California movement drew some inspiration from the effectiveness of Venezuela’s transition towards Petro. Although in the case of California, the pegged assets wouldn’t be oil but instead land and other more sustainable commodities. 

It’s overwhelmingly likely that we won’t be reading up on how California won independence from the United States and pioneered its own self-sustained tokenised crypto economy as the 2020s rumbles on, but there’s hope out there for another developing nation, or innovative region to discover the potential of stabilised cryptocurrencies and their application in creating a rich economy that rewards its citizens proportionately. 

All views and opinions expressed in this article are the opinions of the author and not FXStreet. Trading cryptocurrencies or related products involves risk. This is not an endorsement to invest in or trade any of the cryptocurrencies, stocks or companies mentioned in this article.

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