El Salvador was the first nation to adopt Bitcoin as a legal tender and now Brazil wants to follow the small Central American nation.
The start for El Salvador was certainly bumpy, due to Bitcoin’s short-lived plunge compared to the U.S. dollar shortly after its launch. The project’s bumpy start was used by mainstream media to highlight the risks of adopting cryptocurrencies. However, when the price came back impressively, the voices stayed away. The bitcoin price is certainly a risk, as the price can be very volatile. Holders of fiat currencies usually do not have these short-term fluctuations. Also, in terms of foreign trade, the U.S. dollar is still the driving force as the world reserve currency.
There are certainly various risks, and especially when implementing new technologies, skeptics see the old system threatened. New technologies have the potential to disrupt the system we are forced into. This was the case, for example, with the introduction of printing and the Internet, and now the pendulum is swinging to the monetary system.
Especially when it comes to currencies, governments and monetary guardians see their monopoly position threatened.
Fiat currencies are debt and made to keep the middle and lower classes poor
Our brain has various tasks and one of them is to keep us safe. When we feel safe we are far more relaxed than when we are exposed to danger and most people have a sense of security when looking at their savings and fiat currencies. Few question whether this sense of security has been programmed into our brains because the fact is the rich and upper-class hold assets.
Cash is Trash
Another fact is that 2 billion people in the world do not have access to the financial system we know. In the case of El Salvador, 70% of the population cannot participate in the financial system, as the country is one of the poorest in the world.
Bitcoin could become the game-changer for the normal population. When workers are paid in Bitcoin, they no longer need a middleman such as financial institutions. The only thing they need is a wallet in which to store their Bitcoins. Pay and send Bitcoin without expensive transaction fees.
Bitcoin implementation could also be an opportunity to attract crypto investors to the country. If the case should arise when the fiat system collapses, investors could turn to countries that are free from the financial system. Especially since Bitcoin is an asset that is easy to transport, unlike gold and silver. In addition, cryptocurrencies are decentralized, which eliminates the monopoly of the government’s monetary system.
El Salvador’s Bitcoin project is certainly still in its infancy and now Brazil also wants to introduce Bitcoin as a legal currency. This could be a new chapter in the cryptocurrency success story. Countries that are adapting Bitcoin should not be held back by the initial technical difficulties but should push ahead with the constant development of the technology. It is not only Bitcoin but the whole Blockchain and DeFi industry is awakening. This could be a great opportunity for the lower and middle class and what happens if the Bitcoin price continues to rise? Maybe to $100,000 or soon $500,000….
The pendulum is swinging and now it looks like the next disruption is happening.