Who would have thought a small country like El Salvador could play such a huge role in crypto? Most of us have only heard bad things from that part of the world (Central America) mostly dealing in narcotics, so this was quite unexpected. Not going to sugar coat things there as the country does have severe crime issues including drugs and arms trafficking. It wouldn't be my first port of call, but things can change.
The announcement by the President of El Salvador the other day stating that Bitcoin was going to be a legal tender in his country has huge ramifications outside of his small country. This move has definitely put them in the spotlight for all the right reasons and is most likely giving Finance Ministers around the world sleepless nights.
The reason being that once one country accepts Bitcoin or any other crypto currency as a legal tender then so do all the other countries in the world. Bitcoin in all things is a legitimate currency as of today as the bill was passed through the El Salvadorian parliament.
Any country defying the El Salvadorians wishes by not accepting Bitcoin goes against the laws of international comity and is basically insulting that nation. This is something that doesn't happen so the likes of Nigeria and India will have to come up with an alternative option in having to deal with cryptocurrencies. Banning is no longer an option and they now need to find a solution to move forward.
Who would have thought a tiny country in Central America would wreck any ideas the establishment would have of derailing crypto. The one card they had of threatening the crypto community or more likely trying to slow the process down was to put obstacles in it's way. How can they now as Bitcoin has the same legitimacy as the US Dollar, GBP , Yen ,Euro or any other nations currency out there.
I know in @asphamilton's post last night he mentioned the reasons behind the move and this is worth a read.
El Salvador & BTC - Deep Dive on Momentous Impacts
We are definitely going to see a change happening over the next few years and these are not exactly going to be tremors but more like seismic shifts. The Dollar has many question marks hanging over it's head right now with most countries using it for trade purposes and if the devaluing continues for much longer then an alternative needs to be found. I know the imports we are currently landing were valued at a exchange rate of R15 to the Dollar and now that has slipped to just over R13. These goods are now 20 percent overvalued from when they were first ordered and this makes a massive difference not only to South African importers, but importers around the world.
The Dollar is losing it's spending power quite quickly and that must be a worrying sign of what is to come. I remember saying this when The US printing press was working overtime and people on here were saying it would have no affect. It has to and now we are seeing this and is going to be catastrophic for the American economy as it deteriorates. For every action there is a reaction and we will have to wait and see how bad this is ,but from where I am standing it doesn't look very good. This is not surprising that China is trying to get a digital currency off the ground as they can smell a once in a life time opportunity to replace the USD for trading purposes.
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