It was already in the air and now the Republic of San Marino is apparently accelerating the issuance of its “cryptocurrency”. In fact, it will not be a real crypto, but rather a CCF: Compensation Fiscal Credit.
San Marino is one of the smallest states in the world, located in Italy, between Emilia Romagna and Marche with about 34 thousand inhabitants.
It is currently struggling with the post-Coronavirus crisis and a debt of 360 million. To settle this debt, according to reports from Milano Finanza, Finance Secretary Marco Gatti has a plan: to issue government bonds for 500 million to be placed on the international market. There is also a plan B: to issue Titano, a virtual currency, deposited on the Smac card, an electronic card widely used in the territory.
As part of the project of the small Republic, Titano will be used to pay 30% (maximum) of salaries and pensions.
Titano will only be used to “generate liquidity” to help families and businesses that remain below a certain threshold. It will be spendable only in San Marino, and if its circulation will become excessive, it will be withdrawn from the market. A Titano will have the value of one euro.
The issuance of this cryptocurrency or better to say, electronic money, is the result of the fact that San Marino cannot issue its own currency. Titano aims to overcome this obstacle.
At least from what is circulating in these hours, Titano does not seem to be a real cryptocurrency, as there is no reference to blockchain technology.
It will also be pretty centralized, since it will be the State to establish how big will the supply of Titano be, to the point of withdrawing the electronic currency from the market if it reaches an amount higher than expected.
The cryptocurrency of San Marino pioneer of electronic money
While much larger countries such as China are struggling with the issuance of their state currency, San Marino may have taken a step forward, overtaking everyone. The issuance of Titano would seem to precede that of the digital Yuan, which is being tested in Beijing.
It goes without saying that San Marino is a micro-world compared to China, and perhaps its small size allows projects to move forward more quickly.
But the San Marino Titano also seems to be a “light” version of what is the approach of the so-called CBDCs, an acronym which stands for Central Bank Digital Currency.
Titano has the centralization in common with this approach. For the rest, it seems to be only a sort of token which, not by chance, will end up inside a card, the Smac Card, used to accumulate points and have discounts in the affiliated shops of the Republic.
There is no mention of a digital wallet either, nor is there any talk of exchanges between users. In short, it will be a general means of payment, useful in a country where no further injection of liquidity is allowed in the more traditional system, which involves printing money.
Titano, a debt security by the State
The Institute for Innovation in San Marino has specified what Titano is:
“Certificates of Fiscal Compensation (CCF in Italian) have nothing to do with cryptocurrencies or bitcoin. In fact, blockchain technology will not be used for the realization of the CCF project and, above all, it is a structurally and functionally different instrument: CCFs have the function of debt securities issued by the State with which the State guarantees an equivalent tax discount on the nominal value of the security, circulating on an internal exchange system”.