Ray Dalio (Trades, Portfolio) is seeing digital fiat currency as the wave of the future, making an investment in electronic payment technology slightly more above-ground than bitcoin, as it will be used by one of the most legitimate of institutions, central banks.
Considering the paper dollar passé, the company, eCurrency, brought together engineers and scientists to translate it into legal digital tender used and circulated exclusively by central banks of nations to any digital platform. eCurrency’s hardware, software and cryptographic technology enables the transactions.
Dalio, who runs the gargantuan $150 billion hedge fund Bridgewater Associates, invested in the company’s Series C funding round through his private investment firm, DFO. Other participants in the round included private investment firm Radicle Impact and eBay (EBAY, Financial) founder Pierre Omidyar’s Omidyar Network.
“We are excited about the transformative impact eCurrency will have on the lives of people around the globe who will now have access to safer and lower cost currency to enable their economic prosperity,” DFO’s CEO Janine Racanelli said in a statement.
Dalio’s investment ties into his growing interest in emerging markets, where he has allocated more than half of his firm’s public long portfolio to the ETFs Vanguard FTSE Emerging Markets (VWO, Financial) and iShares MSCI Emerging Index Fund (EEM, Financial). eCurrency aims to increase financial inclusion and economic growth in emerging markets by making e-money and digital transactions as common as those using cash.
Yet the company has no plans to replace cash all together for everyday use.
“There are people who predict that paper currency will go away or coins will go away. We don’t know that, and we don’t necessary even think that,” eCurrency CEO Jonapthan Dharmapalan said in a presentation at the 2015 AFI Global Policy Forum.
“But we do believe that by digitizing the currency the central bank can invite all digital enabled public, they can invite banks, commercial banks, they can invite mobile money operators, digital financial service providers and the wider public to participate in base money in paper, coin and digital.”
eCurrency’s digital currency production engine, as displayed in the presentation resembles a pyramid with a slot at the top. Kept in a vault, the technology creates the currency offline, not connected to a network, and central banks operate it as needed.
At the time of the presentation, the system was being piloted at central banks around the world, and beginning to move from pilot to reality. On Nov. 4, 2016, the Banque Regionale de Marches (BRM) had adopted digital tender, calling it eCFA, for use in the West African Economic and Monetary Union (WAEMU), which includes countries like Senegal, Cote d’Ivoire and Benin.
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