With the new plan implemented, there will be short and long term costs and benefits. Of the few costs that will incur from the plan, there are long term benefits that will result from them. The new plan will require virtual currency transactions to go through an intermediary, which will add on an additional cost. The extra cost will deter some consumers and vendors away from using and accepting virtual currencies as a form of payment, resulting in a drop in value in virtual currencies.
The drop in value would give the virtual currency holders less purchasing power. This will continue to hurt the manufacturing sector. However, we see this as a short term cost only.
When consumers and vendors start to see the convenience of using virtual currencies combined with the scarcity of virtual currencies, there will be a high possibility of an increase in the market value. The increase in the market value will contribute to the growth of the manufacturing sector. Having a growing economy would mean that the government would need to rely less on foreign investments, enabling them to cut down the interest rate of foreign investments. These are the long term effects of the plan.
Other benefits that will see immediate results from the plan are: a decrease in illegal transactions involving virtual currencies and more jobs. Because the intermediaries will be able to identify the people involved in virtual currency transactions, citizens will be less likely to use virtual currencies in illegal transactions.
With the job market, the new plan will require extra reporting and because the creation of the union will promote trading opportunities, there will be a demand for more workforces. This demand will lead to more jobs; cutting down on the unemployment rate.
We highly recommend this plan because we see an overall long term effect to the economy and citizens of Uqana through