Is It Possible That Bitcoin Finds Its Practical Use Case As A Currency In Latin America - Part 2
The discussion continues taking into account, Eduardo Gomez. How is he taking the stage in a storm? Read the second part of the discussion.
Why Target Latin America?
While Bitcoin is taking the Centre stage the countries are vying to be the regions’ richest countries, in the parallel world both Argentina and Venezuela were it not for their leaders’ penchant for mismanagement and corruption along with oil reserves greater than those of Saudi Arabia, Venezuela should be thriving. Regarding the experiments with socialism instead, it has resulted in more than two million people leaving the country, along with a wrecked economy as well as a humanitarian crisis threatening regional stability.
With the current crisis being far more complex, as also yet more predictable due to the country’s history of boom and bust. While the truth is that despite the initial optimism voiced by foreign investors, also the right-leaning pro-market government came to power in 2017 the optimism is not reflected in support for the peso.
Suffering due to other factors, where the peso amongst others a straightening dollar, dwindling foreign currency reserves along with investor mistrust. As inflation causes past polices of overprinting money to service local debt combined with the current government’s elimination of energy subsidies meaning that Argentines are sure to be on Monday what their money will be worth on Friday.
How Is The Cryptocurrency Doing In Latin America?
As an example, in a recently discovered notebooks of a government chofer, they reveal that the businesses close to the current president alleged to have paid bribes with bitter rivals from previous government regardless of ideological difference, where Latin America’s political class is often united in the penchant for corruption.
Indebted to the cyclical nature of Argentina’s currency crisis is what it gives some hope that the country became the first to develop a thriving national Bitcoin market that is already a hotbed for blockchain-based companies such as Ripio, Buenos Aires with a higher percentage of businesses accepting Bitcoin than New York.
It is in this context that an Argentine entrepreneur known as Agustina Fainguersch came to the limelight helping companies which include any in Latin America, as the managing partner at Wolox, they manage digital transformation through the adoption of technologies such as blockchain, Bitcoin as a practical solution for average Argentine who is just trying to make ends meet.
She states that in Argentina, exchanging pesos into dollars and back again within a week is possible given the pesos lost 50 percent of the value against dollars since the beginning of 2018, where most are changing money for short term survival rather than long term savings as many Argentines are often just trying so that they make sure they have enough of the money available to cover basic expenses.
The advantage Bitcoin has over other currencies according to her is it is increasing availability with such acts as an alternative to the US dollar as she has seen how over a few years more and more Argentines access the cryptocurrency as easily exchange pesos. She notes that as long as it’s less volatile than the peso it’s attractive as Argentina has a long history of navigating volatility.
Placing Bitcoin at a disadvantage is the volatility which is also a risk when compared to the US dollar widely available the dollar is relatively stable as also relatively easy to exchange though not without burdens risks such as falsified bills hence the extra value placed on crisp bills.
What Are The Views Of The Experts?
While it has been found by the Argentine political scientist and founder of regional think tank Asuntos del Sur, Matias Bianchi that demands Bitcoin in Argentina following a familiar pattern where the technology promises democratizing access to something where the benefits of said technology most likely end up helping a wealthy few at the expense of the increasingly hard-luck masses.
Also, it is a fact that Bianchi believes that in the case of Bitcoin its adoption in Argentina is driven in large part by a wealthy class always looking for ways to subvert the country’s institutions protecting its wealth and befitting from speculative financial activities. He says that Bitcoin allows the elites to opt-out of the poor decisions made by the government they help install as after all unequal access to technology often means unequal access to benefits of technology.
Talking of an alternative to the national currency is elitist hogwash for Bianchi as even if a larger and larger percentage of Argentines using Bitcoin, as Bianchi argues 100 percent of them still need to use pesos. Opting out of the peso as such is a luxury of some but not for a viable solution for all. Bianchi is of the view that Bitcoin is more like a modern-day offshore account removing wealth from the economy and shifting the burden of bad government to the poor. Similar to the Cayman Islands account on the phone as well as in countries where corruption is rife, and stability is rare the technology is bound to thrive.
The more the Venezuelans arrive in Argentina the more it is like the aforementioned Eduardo Gomez, who with the new country’s currency woes are not unfamiliar as the previously mentioned Eduardo as a student in Venezuela as he first discovered Bitcoin with the bottom falling out of the Venezuelan economy where Bitcoin mining became a popular activity in the country where everything is subsidized including energy. This has them caught in the government and cracked down as not before a nascent Bitcoin community took form.