Hyperinflation, Optimal Currency Scopes, and a Cryptocurrency Alternative to Dollarization

The birth, growth, and development of cryptocurrencies and their underlying technologies, such as blockchain and directed acyclic graphs, have made it possible for nations suffering from hyperinflation to adopt a customized cryptocurrency, with attributes specifically designed so that any nation wishing to transition from hyperinflation to a more stable monetary environment could do so. This paper identifies the sixteen most important attributes that this cryptocurrency would need to be a credible and viable monetary reform alternative. We call the breadth and depth of these attributes a cryptocurrency’s scope and refer to the act of adopting an optimal cryptocurrency, cryptozation. HACC (Hyperinflation Alternative Cryptocurrency) is our name for this specially designed (i.e., “optimal”) cryptocurrency. To succeed, the HACC would need to have near-immediate curative properties and provide user nations with a foundation for long-term growth and financial development. The HACC should be built for use by any nation considering currency reform, even those thousands of miles apart. As more nations adopt it, the HACC’s network would grow, increasing users’ trust and use. The HACC would sharply curtail a central bank’s ability to finance government deficits and bail out failing, nonviable financial institutions, thereby incentivizing them to manage their financial risks more prudently. It would also eliminate or sharply curtail ways in which governments and central banks can earn seigniorage returns.