During historical economic crashes, to present-day uncertainty surrounding the global coronavirus pandemic, finding refuge amid the chaos of volatile market forces is a priority for many. Monetary policy levers, including the recent printing of trillions of dollars-worth of currency worldwide, can act as a smokescreen to the true performance of the economy. The aftershock that follows, how market intervention measures affect the value of currency, at the expense of creating a fleeting sense of stability, for most, is rarely ever good news.
For the individual, weathering an economic storm can come down to the possession of assets.
Take the Great Depression, a devastating financial crisis triggered at the end of the 1920s that produced the worst economic downturn of the 20th century. Between 1929 and 1932 alone, global GDP fell about 15% and unemployment rates in the United States reached 25% by the crisis peak in 1933. International trade fell by more than half.
Over-optimistic loans by lenders, exceptionally high consumer debt, and a lack of new, high-growth industries have all been cited as factors leading up to The Great Depression. Today, the world is faced with the potential for another economic downturn given the historically significant amounts of government, corporate and individual debt – not to mention the unknown long-term impact of the pandemic upon the global economy.
The devastating conclusion of a decade known as the “Roaring Twenties”, for its booming economic prosperity, is a sobering reminder of the importance of stable assets.
Central banks cut rates as a means of spurring borrowing and investment to fuel growth and employment, which can lead to inflation. But this has pushed interest rates well below historical levels, leading to unrestrained risk-taking and more financial instability, volatility and eventual contraction. And with the interconnected nature of the global economy, this can have wide-ranging effects.
Holding fiat currency as a store of value will lead to long-term negative consequences, given that the loss of buying power is inevitable. Which stable assets can help to keep your wealth intact during a massive economic downturn? Historically, the answer to maintaining stability is to own financial assets such as real estate, precious metals and equity in corporations, among others.
With the advancement of blockchain and cryptocurrency technologies, the possibility exists to have assets outside of the traditional financial framework – shielded from the often damaging effects of central bank policies.
AXIA, a forthcoming digital currency, allows the global community to participate in a new economic paradigm. AXIA is unlike other types of cryptocurrencies as its value is backed by a combination of real-world assets including metals, precious gems and real estate. A first-of-its-kind value proposition, AXIA is creating a true store of value in its token, protecting purchasing power and creating a safe haven for its network.
The value of other cryptocurrencies such as Bitcoin and Ethereum is not tied to particular assets, while so-called “stablecoins” like Tether are pegged to a fiat currency. Stablecoins tied to fiat currency will be affected in the same way by economic conditions such as inflation. Other cryptocurrencies, namely Bitcoin, have seen massive volatility due to simple supply and demand economics, and do not have the fundamental ability to act as a safe haven in moments of economic crisis.
AXIA offers its users a new type of digital asset with a finite token supply linked to a robust ecosystem that provides real-world utility. This includes a suite of communications services (chat, video and voice calling) or connected financial applications that provide opportunities to connect with businesses and charities in a new form of value creation. Withdrawn from the systemic risk associated with fiat currencies and certain stablecoins, AXIA also has intrinsic value. It is thus alleviating the price volatility of alternatives like Bitcoin, whose valuations are strictly based on perception.
AXIA leverages blockchain technology to offer a transparent and trustworthy economic system that allows anyone to participate. AXIA is setting a new standard of what currency is, what it can be, and what it can do for us.