Argentina has always been involved in cyclical economic crisis. Devaluations, defaults and and an immense public spending. This is why Michael J. Casey, chairman of CoinDesk’s advisory board, has proposed the Argentine government to overcome the latest crisis with a solution that partly includes Bitcoin.
Bitcoin to Solve Argentina’s Economic Problems
In an article published on September 10, Mr. Casey explains that Argentina tried many different economic solutions for its permanent economic chaos. According to him, there might be a solution to this situation embracing crypto-friendly approach on the matter.
Casey has been living in Argentina for over six years, in Buenos Aires. He mentioned the good things about living in this South American country, but he also highlights the main problems that the nation has. The main issues he marked were: broken civil institutions, corrupt governments, and a dysfunctional economy.
He says that the problem of Argentina is related with trust. Something that virtual currencies and blockchains solve using a decentralized approach.
If citizens do not trust their government, then they would also not trust their currency. This is the story of Argentina. And indeed, the country moved from being one of the richest in the 20th century to one in the middle of the list.
He asks about the future of Argentina:
“What if a digital currency that’s easily available for electronic, cross-border transactions became these people’s go-to means of storing wealth, rather than greenbacks stored in hidden safety deposits boxes that can’t be easily moved offshore?”
However, he was not the first thinking in this way. Wences Casares and Andreas Antonopoulos were already thinking about a crypto solution for these problems.
And indeed, Buenos Aires is now the second city with the most crypto-related projects in the world.
Moreover, Santiago Siri, a blockchain enthusiast and developer from Argentina, proposed Luis Caputo, President of Argentina’s Central Bank, to place up to one percent of its national reserves in bitcoin. It seems a modest idea but it could have very important effect.s
The solution proposed by Siri would add more diversity to the central bank’s reserves. Moreover, Siri suggest the government to start mining virtual currencies with its large nuclear power capacity in order to expand its reserves.
This shows that there is a meaningful interest in improving financial innovation in the country. Having 1% of the total reserves in Bitcoin could help the Central Bank experience an increased revenue in the future if foreign governments abandon their dollars during a global trade war.
As in the past neither orthodox nor heterodox measures worked in the country, this could be the best moment to try a new approach outside the mainstream. Perhaps Bitcoin.
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