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21 sats \ 6 replies \ @edulopesf 21 Aug 2023 \ on: Brazil's Proposal for BRICS Currency and Geopolitical Reforms bitcoin
Do not expect any country to take favorable actions towards bitcoin.
- El Salvador just started using Bitcoin because they didn't had their own currency. They had US Dollar as official currency.
Any country that works under 'Central Bank' rules has to rely on their own currency in order to pay for their expanses. IF they start using Bitcoin, it means they are giving up the control to finance itself.
Presidential Democracies like Brazil needs to "buy" support from their congressmen in order to proceed with their political agenda. That means they need to print or use tax money to keep things running.
If Bitcoin becomes the norm in a country like Brazil, the whole political system becomes obsolete.
It's especially dangerous (for the government) if a movement like that starts on Import-Export companies, since they usually are major distributors, it'll be just a step so they start selling their products inland accepting BTC. If that happens, all monetary control over imports/exports WILL BE LOST and the country's 'Trade Balance' will fall apart.
That would result in huge depreciation from the local currency against the Dollar and Bitcoin.
EVEN I, that I truly want BTC to become the norm, I think, for a softer transition, it would be better people started using Bitcoin before being used for import/export. Local population, without the 'know how' would suffer a lot until things got better. It could even jeopardize the Bitcoin reputation.
There are other countries in the region that also don't really have their own currencies. If El Salvador is clearly successful with Bitcoin, I could see it catching on throughout the smaller Central American and Caribbean nations.
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True, that's because, as beforementioned said, they don't have their own currency, the whole system is already adapted to work with a foreign currency, in those situations the transition to Bitcoin will be faster and softer...
El Salvador is the best case study for economies like theirs.
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I specifically brought it up because you led with
Do not expect any country to take favorable actions towards bitcoin
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Well, that doesn't mean local governments will be favorable. El Salvador seems to be an exception so far... It means it would be easier for these countries.
Actually I would like to know how much the population of El Salvador is using bitcoin.
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I've been curious about the extent of Bitcoin use in El Salvador, too. It's hard to imagine people aren't still using lots of specie for their regular transactions.
The big hurdle for small Caribbean countries will be that tourists bring in tons of dollars, so there's strong organic pressure keeping that the locally preferred currency.
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I've just opened a new thread asking...
here: #230693
About the tourists, that's also true... And might be a negative point towards adoption of BTC since there would be no apparent incentive to use bitcoin.
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