Topic: will Argentina follow El Salvador? (Read 648 times)

Almost every politician is waking up to the fact that crypto is mainstream, and is now here to stay. Most big coins are already established and aren't going anywhere. Bitcoin, Ethereum, XRP Tether Monero etc. Each have their own use cases for society.

I think they’re not focused on returns here but rather on using Bitcoin as a hedge against inflation and a way to attract investors. For countries struggling economically, their policies should be more secure (low risk). They can’t just put their budgets into Bitcoin and hope it grows in the future. They need consistent growth in their funds, which means investments with real returns that they can control and evaluate in the short term. Some experts still consider Bitcoin a speculative investment, so why would they take such a risk?

Their country needs investors, and Bitcoin might help open that opportunity, but they need to turn this idea into reality first.

Argentina and other countries will be attracted with success of El Salvador but they must be realistic that with time and future marke cycles, Bitcoin will have lower ROIs than its ROIs since 2009 till now. Bigger market cap will always mean slower growth rate with time.

They as countries can not change their economic situations with Bitcoin. Bitcoin market is small and Bitcoin can not contribute huge weight to their national economic, it's reason.

They can make a more friendly legal environment for Bitcoin. Create Bitcoin adoption, legal tender, national reserves partially in Bitcoin, but it's only one piece of their economy. If they want to improve their economy, they will have to do more, and surely beyond Bitcoin. It can contribute good weights for small countries but with average and big nations in economic sizes, it won't help too much.

Yes, I think that all countries that want to change their economic situation should definitely move towards Bitcoin adoption. What El Salvador has done, other countries will also do, but some will come quickly and many will come late. Any investment is risky, but those who accept that risk and invest can face profit or loss, but those who cannot take risks will never be able to make profit.

Argentina may be attracted to how El Salvador investment in bitcoin grew rapidly just within this few years they’ve adopted and bought some of them. They could possibly be looking for ideas on how to go about them also adopting bitcoin and profiting from holding an asses like bitcoin.

It is great to know that some countries are open to this market in looking for ways how to help their country in fighting the inflation or currency devaluation in their country. Would be a hard decision but I believe, they need to try paths outside of their traditional dealings in order to avoid their economic downfall without a fight.

I wonder if he will do it the same way as El Salvador meaning to introduce a centralized custodial wallet like Chivo that people would have to use for their bitcoin storage and payments. Meaning full government control over people's money like the banking system that only carries the name "bitcoin".

There should always be a pair, like USD/Bitcoin, and in that sense, Bitcoin will circulate while the government profits from the wallet they designed. But that’s just a small part of the picture. The bigger picture is their goal to capture global attention, and it seems they’ve succeeded in that aspect.

As for the economic impact, it’s not instant, it will take time. Just like holding Bitcoin, it requires patience.

We should be realistic that adopting bitcoin as a national currency will not solve the problem of inflation or improve the economy.

El Salvador inflation rate for 2023 was 4.05%, a 3.15% decline from 2022.
El Salvador inflation rate for 2022 was 7.20%, a 3.73% increase from 2021.
El Salvador inflation rate for 2021 was 3.47%, a 3.84% increase from 2020.
El Salvador inflation rate for 2020 was -0.37%, a 0.45% decline from 2019.

Federal Open Market Committee (FOMC) judges that inflation of 2 percent over the longer run, as measured by the annual change in the price index for personal consumption expenditures, is most consistent with the Federal Reserve’s mandate for maximum employment and price stability. When households and businesses can reasonably expect inflation to remain low and stable, they are able to make sound decisions regarding saving, borrowing, and investment, which contributes to a well-functioning economy.

Even though El Salvador has recognized bitcoin as legal tender, but they still use USD as their currency along with bitcoin, bitcoin is not the only currency or the only option. There are no reports from them that tell us that bitcoin is being used as a popular currency there. Also, the government of El Salvador is investing in bitcoin and they have no intention of taking profit, which makes me wonder how bitcoin is impacting the improvement of their economy.

We should be realistic that adopting bitcoin as a national currency will not solve the problem of inflation or improve the economy.

I am not exaggerating it, I've said that it can help and stabilize their economy if ever they do. What they can do if they've got already some high inflation and if they keep repeating on the process? if something is done differently maybe there will be some visible improvement to them just as how we're seeing Bitcoin right now impact an individual life. But you're right about the latter part, the government has the biggest role in there in providing those things into its people. If they're not for the people even if they invest billions or trillions of their country's wealth in Bitcoin, nothing will be felt by a normie.

Since El Salvador only owns/hodls bitcoin and they are not selling it, you can't really say they made a  profit.

Even though it is a cool development but I have to say that things are not that simple that if a country with economic problems adopts bitcoin, it would magically help. It may even cause more problems if not done correctly and without fixing other problems.
Think of it as an individual with lots of debt borrowing money to invest in bitcoin and then bitcoin crashes and they have to panic sell and be in an ever bigger debt.

El Salvador situation improved under Bukele not because he adopted bitcoin but because of hundreds of other good decisions he made like solving some of the fundamental problems in the country like the gang problems, the corruption, the attracting of foreign investment, etc. Bitcoin was like the cherry on top. For example as Bukele improved the country's security and started attracting foreign investment, he also did it through bitcoin.

It is the same with Argentina. Bitcoin is not the magic solution to solve decades of economic problems. The crazy man in Argentina has also done a lot of additional damage ever since he took office to the point that Argentinian inflation went to almost 300%.
Although some claim that this "shock therapy" is going to help in the long run but still bitcoin can only be that "cherry on top" not the solution itself, and only after dozens of fundamental issues in Argentina are solved.

But with centralization, all its corruption creep in as well.
For example, what will stop them from running fractional banking? Like to only have 10 bitcoin but sell 10000 to people! That way it won't be bitcoin adoption that grows, it will just be a corrupt system ripping people off and taking their money giving them fake bitcoins in a fake application.

If he doesn’t take action, then a private entity will probably step in with his approval. This is no different from exchanges, it’s a wallet that lets you convert your Bitcoin to USD and connect it to your bank account. I think it’s safe because it’s regulated, but of course, you’ll lose some privacy. That’s the trade-off when Bitcoin becomes part of a regulated system.

I just stumbled upon this news, and I find it very positive and worth sharing as it might signal that Argentina could soon follow in El Salvador’s footsteps by making Bitcoin a legal currency.

From what I’ve read before, it’s often better for countries struggling economically to adopt Bitcoin.

This might be the case here, especially since El Salvador is now gaining recognition for its Bitcoin investment and has already profited more than 100% at the current price compared to its original investment.

Yes, Argentina's economy does not depend on Bitcoin and its value at the moment. No other country has such a dependence. That would be strange. You can still understand from the mining process, since this is the direction that is gaining momentum all over the world and no one will argue with the fact that it brings profit. On an industrial scale, this is simply a super profitable business. Therefore, I would consider this option with the Argentine authorities.