How a Digital-Assets Ecosystem Could Jumpstart an Inclusive Digital Economy
Many countries are looking to transform their economies into digital ones, with the aim to progress from a production-based to a service-based economy, and also to increase economic and societal value for their nations. A digital economy requires more than just ambition. It needs the development and establishment of ecosystems that bring a nation’s economy, businesses and society together into an integrated and coherent system.
Governments, especially those of developing economies, realise that their countries might be caught in middle-income traps, income inequalities and/or social and economic imbalances. This leads to the desire for long-term, national development strategies with ambitious objectives, not only economically but also socially, specifically to raise competitiveness and increase the value of products and services delivered to their societies.
Such aims are usually based on multiple values and driven by innovation—moving from producing commodities and agricultural goods to technology-based, innovative products. Many countries call this a digital or smart economy by emphasising technology, creativity and innovation in industries and areas with significant growth potential. Other objectives for such an economy might include sustainability, environmental protection, health, prosperity, social welfare and poverty reduction, many of which are represented by the United Nations’ 17 Sustainable Development Goals (SDGs).
In a digital economy, everything is connected with anything at any time, which is why it is often also called a smart economy. Three fundamental elements required for such an economy are:
This article’s main focus is on the significance of digital assets in the context of a digital economy. Digital assets are understood to cover not only the traditional financial-instruments space but also non-materialistic values, such as personal data—including identity, health and medical, geo, behavioural and social data.
To make this less abstract and more tangible, the envisaged ecosystem(s) could be represented in the following diagram, with the Digital Asset Platform (DAP) at its core.
Given this—admittedly simplistic—high-level structure, it becomes clear that the foundation of value creation consists of infrastructure, utilities and public services, including non-material factors. Most importantly, solid financial infrastructures and systems are required to enable the exchange of products and services within and between the various ecosystems.
A digital-assets ecosystem in the context of a digital economy
A digital-assets ecosystem can have a widespread transformative impact on an economy as a whole as it is based on data generated from transactions across the ecosystem and on allowing other ecosystems to collaborate with digital assets and their marketplaces. If implemented across a whole country, digital assets, in conjunction with distributed-ledger technology, can integrate and interconnect all parts of the economy and society from healthcare to education, human resources, taxes, welfare systems, pensions, energy, transportation, cyber-security, secure and trustworthy identity documents, law enforcement, government, taxes, financial services… the breadth of applications is enormous.
Additionally, utilising digital assets and diverse, distributed yet interconnected blockchain variants will enable these sectors of economies, societies and financial markets to grow at a scale corresponding to their priorities and needs. A trusted digital-assets ecosystem is the foundation of an inclusive economy and, therefore, facilitates the means by which products and services are exchanged among participants within and across ecosystems.
Digital assets will allow the introduction of new forms of asset ownership by issuing various forms of digital tokens.
