Examining the Concept of Flatcoins: Crypto Tools to Battle Inflation
With the issue of inflation rising as a real problem for global economies last year, there has been a renewed need for people to seek a way of preserving their purchasing power.
Flatcoins, stable currencies that change their value according to the inflation in a determined jurisdiction, have surged as a crypto-based solution for the issue.
The problem of rising inflation has gained notoriety this year
as large world economies that had traditionally kept prices relatively under control were affected by a loss of purchasing power. For example, U.S. inflation touched
9.1% during 2022, reaching one of its highest levels since 1981.
This rise prompted a swift response from
the Federal Reserve, which started hiking interest rates to address inflation. However, the problem of losing purchasing power remains for citizens and companies
that have to deal with these price distortions.
Flatcoins are designed to address this issue by proposing inflation-adjusted stablecoins that allow users to preserve this purchasing power, meaning that if one unit of this proposed token serves to purchase a determined item today,
it would be able to do so five years from now.
