Afghanistan is apparently rich in minerals and has an estimated $3 trillion in reserves, including lithium which has suddenly become very valuable due to its use in lithium powered batteries.
“The previously unknown deposits — including huge veins of iron, copper, cobalt, gold, and critical industrial metals like lithium — are so big and include so many minerals that are essential to modern industry that Afghanistan could eventually be transformed into one of the most important mining centers in the world,” according to US officials.
The impoverished nation bordering China, Iran and Pakistan can not raise funds at market rates, however. So they’re apparently thinking of tapping into global markets through crypto.
Khalil Sediq, Governor at the Central Bank of Afghanistan, said that the country was seriously considering issuing a sovereign crypto bond to raise some US$5.8 billion in needed private-sector investment. Asia Times, which spoke to Sediq, says:
“Sediq went onto say that Bitcoin could be coupled with a form of metals future, such as lithium, and noted that the value of Afghanistan’s mineral reserves was now estimated at more than $3 trillion.
Afghanistan is set to become one of the world’s largest miners of lithium, a metal that is in short supply because of electric-vehicle demand triggered by Elon Musk’s Tesla Inc and others.
Afghanistan is facing severe restrictions on non-concessionary borrowing and a crypto issuance, argues Sediq, could offer a way to access international markets via a first-of-its-kind financial instrument made possible with hyperledger’s blockchain technology financial services platform.”
They’re mentioning bitcoin here, but obviously this kind of has nothing to do with bitcoin. It sounds more like Venezuela’s Petro token.
This appears to be at very early stages so details are sparse, but the choice of Hyperledger is curious because that is a private blockchain.
That means crypto exchanges, for example, can’t easily tap into Hyperledger and moving the lithium token would be difficult.
The obvious choice would be to go with ethereum where thousands of tokens run and are trading on global exchanges, including decentralized exchanges, daily.
Then there would be no trust question as far as the tech aspect is concerned because all would be able to see and verify the smart contract code.
The lithium peg, however, would have to be managed manually with one option there being to guarantee a redemption of the token for lithium.