A virtual currency system used on the Italian island Sardinia, Sardex, appears to have been gaining traction in helping businesses overcome the local credit crisis.
Sardinia is an autonomous Italian territory in the Mediterranean with a population of roughly 1.7 million. The island carries a distinct cultural identity from the rest of Italy, home to several other languages.
The island, in a sense, also operates its economy separately from mainland Italy. It had at one point even been envisioned for a tax haven, much like its tropical counterparts. But it got caught up in the 2010 European debt crisis, during which Italy was hit particularly hard. The island’s location also adds general pressures to its economy, as the cost to transport goods and electricity is double that of the mainland. Local businesses, which had been thriving prior to the crisis, found it increasingly difficult to gain access to credit.
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Sardex came into the picture not long after Bitcoin, although outside of Italy, it is still not well known. A recent review by Press TV does a good job detailing the system and participant feedback for the English speaking world, for whom information about the network was previously hard to find. The system was created by a group of university graduates, basically as a means to artificially inject credit into the local economy.
Each unit of Sardex currency corresponds to one euro. The network has attracted over 2,500 businesses, who effectively trade goods and services based on Sardex “credit”. Nearly 120,000 transactions totaling over €66 million have been made to date, €30 million of it in 2014.
During the past year, a number of alternative digital currency systems have sprung up, seeking to mirror fiat currencies. They have ranged in scale from government backed (Ecuador’s version of the US dollar) to one-man bands (Brock Pierce’s Realcoin). A number of blockchain-based initiatives have launched as well. The projects will inevitably vary as to their success, but the Sardinia example shows how in theory, such schemes can help generate access to credit- much to the same as federally sanctioned quantitative easing programs.