If No One World Crypto, What Is Plausible?
Just because the existence of a one world cryptocurrency isn’t a plausible economic reality doesn’t mean that cryptocurrencies cannot offer any real world value.
Because they do.
Both countries have been mired in multi-year struggles with the value of their currencies, especially versus the Dollar. While Venezuela is obviously in a much more dire situation, economically and politically, the citizens of both countries have increasingly turned to crypto.
While we do not know to what extent private citizens in both countries use crypto to conduct trade with each other, we know that at the very least, they see crypto as a valuable means of protecting their purchasing power, at least for now.
On a lesser degree of seriousness is El Salvador, which has made Bitcoin legal tender, released its own crypto wallet, and installed 200 Bitcoin ATMs.
What all three have in common is their need to find an alternative to the hegemony of the world’s reserve currency, the USD. El Salvador has been explicit about this, publicly stating that it moved towards accepting Bitcoin partly because of expensive Dollar remittances.
Whether the citizens of Venezuela and Turkey realize it or not, their enthusiasm for cryptocurrencies is also underpinned by the same need to escape the harsh realities of the global USD system.
That is, the necessity for every country on the planet to be able to obtain Dollars in order for them to participate in global commerce. The instability within these countries, economically, politically, or both, drives their domestic currencies’ value against the Dollar sharply lower.
This in turn creates a whole host of problems for their citizens, not least of which is spiraling inflation and the loss in value of what they earn or save.
Crypto provides them with an alternative to being caught in that trap.
Whatever your view on crypto and its viability is, Venezuelans and Turks are grateful for its existence at this point in time. Which highlights how, under the right circumstances, cryptocurrencies can not only be of use, but also prove to be invaluable.
In this case, it is the accessibility of the blockchain to all who have access to the internet, and the relative ease of swapping in and out of it. Bear in mind that the market for the currencies of many countries can be illiquid. This makes swapping out of such a currency into another fiat currency an expensive endeavor.
Furthermore, whether or not an asset is a “safe haven” is a matter of perspective. The Venezuelans and Turks flocking to cryptos demonstrates this clearly.
In addition, there’s a broader point to this discussion.
We know that individual countries with their own domestic currencies already chafe and struggle with having the Dollar as the global reserve currency. This has been the case for the past few decades, where Dollar funding crises have popped up all over the globe.
The American establishment is aware of, and acknowledges this fact. John Connally, a former US Treasury Secretary, summed it up succinctly with his now infamous quip that “The Dollar is our currency but it’s your problem”.
How much worse would the situation be for countries having to use a one world cryptocurrency without having the pressure valve of their own domestic currency?
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