Presently, we can notice the deteriorating economic situation in many South American countries. Not only Argentina but Brazil, Panama, and Paraguay also struggle with inflation. Alberto Fernández in his interview included several comments about cryptocurrencies. The President of Argentina suggests that the government is open to adopting Bitcoin into the financial system.
Recently, El Salvador made a brave decision and adopted Bitcoin as a Legal Tender. Should other countries follow their decision?
Covid 19 pandemic has exacerbated already high inflation in Southern America countries. We asked Experts about the effects of adopting Bitcoin as a Legal Tender in Argentina. Also they made their predictions about changing the cryptocurrency market.
President Alberto Fernández did not give a specific date for Bitcoin adoption but he admits that the government is open to making such a decision. According to what President Fernández suggests, let's focus on possible changes that the adoption of bitcoin may bring.
We have asked 931 Experty community members questions related to "Bitcoin as a solution for inflation. Will Argentina adopt Cryptocurrencies like El Salvador?". We have received many valuable replies, the best ones (based on Experty community feedback) you can read below.
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Enthusiastic
Can Bitcoin be the solution for inflation? Why?
I am a participant and faithful follower of Bitcoin, Cryptocurrencies and the real situation about inflation in my country Venezuela. And the answer is yes. In a country where 1 single commodity exceeds the minimum wage of a normal person is where the Bitcoin enters to be protagonist with the citizen in a country with inflation. The case of the Venezuelan and the Argentinean is similar. The monthly minimum wage is not enough to provide for the common needs, however, if that common person decides to work remotely online and receive earnings in Bitcoin, save them for a while and continue to accumulate, it will certainly improve his life and that of his family unlike working to earn $5 or maximum $10 a month and at the time of going out on the street, you spend $10 on 2 products. I say that because that was my life. Since 4 years ago I decided to go freelance online, my life has improved a lot. I am not affected by inflation in my country being in Venezuela and that is thanks to Bitcoin and Cryptocurrencies. Long live those who make life and economy in it.
How Bitcoin as a legal tender could affect the crypto market if this solution is used more and more?
I believe that it would affect in a positive way in countries where inflation exceeds the minimum wage, making people who do not have so much economic possibility, making them even poorer. And it will be even more positive in resource-rich countries. Cryptocurrency adoption is necessary for everyone's future. Without a doubt, it is here to stay in my life.
Yudha Eka SaputraWeb Developer
Can Bitcoin be the solution for inflation? Why?
In my opinion, is NO. Because high volatility on bitcoin price. The price is depends on rates on markets and this is will make more inflation even bitcoin can be "store of value" asset. It's just store the value, but no with the price keep stable. The right thing for replacing traditional money is with CBDC. So, the answer is NO.
How Bitcoin as a legal tender could affect the crypto market if this solution is used more and more?
It can affect to other altcoin projects. Altcoin projects can provide a blockchain service such DeFi, CeFi, NFT and IoT to make real usecase in every aspects and can be accessible to everyone.
sekarat bangetDesign
Can Bitcoin be the solution for inflation? Why?
Don’t Count on Bitcoin to Be a Sure-Thing Inflation Hedge. why? 1. Bitcoin has user autonomy Conventional fiat currencies are subject to multiple restrictions and risks. For example, banks are vulnerable to boom and bust cycles in the economy. Sometimes, these situations can end in bank runs and crashes, as has occurred numerous times in the past. This means that users are not really in control of their money. Theoretically, at least, bitcoin promises user autonomy because its price is not linked to specific government policies. This means that users and owners of the cryptocurrency are in control of their money. 2. Bitcoin transactions are pseudonymous Most online transactions require an array of information to identify the person conducting the transaction. For example, transferring money from one person to another can be done only after the identifying information for parties at both ends is verified. Similarly, online purchases also require you to enter identifying information to make a purchase. The verification process may prevent crime, but it also places an intermediary firmly in charge of the transaction, allowing them to control the provisioning of services to select parties. Bitcoin transactions are pseudonymous. While this means that they are not completely anonymous, the transactions can be identified only by using a blockchain address. An individual can have multiple addresses, just as they can have multiple usernames and passwords for a single account. Internet Protocol (IP) addresses or other identifying information are not required to conduct the transaction. 3.Bitcoin transactions are conducted on a peer-to-peer basis 4.Bitcoin transactions do not incur banking fees 5.Bitcoin payments have low transaction fees for international payments
How Bitcoin as a legal tender could affect the crypto market if this solution is used more and more?
I think it's been done by the state of el salvador, What cryptocurrencies have done, is people really embrace the idea of no privacy. Nobody wants privacy anymore. They like the idea that everything is transparent and traceable.” Privacy, in this case, refers to an individual's ability to counterfeit money and evade taxes, activities that governments seek to control. Regarding the central bank's digital currency, Tucker said it was only a matter of time before the Fed Coin was introduced, as well as the El Salvador coin which had been officially announced to be the legal currency in the country.
Bankole OluwamayowaWeb developer
Can Bitcoin be the solution for inflation? Why?
Absolutely yes. I usually define bitcoin as a social network for smart people who like financial freedom. As such, any country that wants to be financially and economically free should embrace bitcoin. Inflation is an inevitable enemy allcountry will surely encounter, because of the diverse reason that leads to that. Among theses reasons are unemployment, importing more than exporting, deflation of fiat among other reason. If a country therefore embraces bitcoin, its annual transactional fees or charges in foreign exchange will automatically disappear which will help more circulation of fund. Besides, Bitcoin is structured technologically to encourage a deflationary attitude and a relatively stable store of value. Just like the role gold plated in the economy of most countries around the globe in the 20th century.
How Bitcoin as a legal tender could affect the crypto market if this solution is used more and more?
Well, everyone around the cryptospace knows quite well that the price of BTC determines the major rise and fall in prices of the alts. Historically, BTC has experience surge in price more and more over time as a result of acceptability. As such, the more BTC is widely accepted, the more it's price surges which will in turn leave a foot print on the alts. In summary, BTC as a legal tender across all countries will enhance swift international transactions and as well leads to surge in prices of all other cryptocurrencies. So it's "a win win game"
Habibu AbdullahiDeveloper Associate
Can Bitcoin be the solution for inflation? Why?
The short answer is Yes! Now the long one, in the case of Argentina and Latin America in general Bitcoin might help but from my experience of 6 years living in Brasil, the political and economic system are the major challenge.
Sean LarkinTraditional, Blockchain and Crypto CFO - Member of MMBA
Can Bitcoin be the solution for inflation? Why?
Bitcoin as a solution for inflation in Argentina This is an interesting question, as I prefer to look at bitcoin as a solution for inflation everywhere. There have been unprecedented amounts of money printing by central banks, and many countries have been embracing monetary policy that is contributing to inflation. Issues surrounding supply chain and workforce, resulting from a year and a half of bad public policy, are beginning to affect consumer prices as well. The combination of these two factors alone will fuel to increased inflation. Argentina is already behind on next years outlook from an inflation and fiscal policy perspective and 40% of the population is in poverty. There are no U.S. investment dollars coming into the nation, making the outlook even more dire. Meanwhile, the volumes in bitcoin trading within the country are soaring as the number of crypto wallets has done a 10x. If the government is smart, they will take heed of this in what we will call a ‘wisdom of the crowd’ moment. Following the lead of the population, it would benefit the nation to embrace Bitcoin, and the technologies that flow from bitcoin. Creating a friendly regulatory environment, encouraging bitcoin and adding bitcoin to the national balance sheet will do for them what their current monetary policy cannot seem to do.
How Bitcoin as a legal tender could affect the crypto market if this solution is used more and more?
Should Argentina make Bitcoin legal tender while we are still in the current bull trend of this cycle, the affect on the larger crypto market would be significantly bullish. It would be reasonable for there to be a positive price impact and could lead to other countries taking the plunge with regards to embracing Bitcoin. Almost more importantly is the fact that this will create 40+ million new individually held, decentralized wallet holders. This is extremely bullish. The internet required that a ‘critical mass’ of individually held email addresses be reached in order for its’ true value to be realized. It is the exact same with the decentralized economy (internet of value). The difference is that, here, we need a critical mass of decentralized wallet holders to be reached. When this happens (and it will), the promises of Web3 and the metaverse will begin to become clear.
Mirb .Investment Specialist,Crypto Currency Specialist,Analyst
Can Bitcoin be the solution for inflation? Why?
Some financial experts believe that BTC does not have a long enough history to determine that, but I think that it is necessary to take a smart risk, because based on the overall situation, it could be one of the safer solutions. By July 28, about 18.77 million bitcoins had been mined, there were only 2.23 million left to put into circulation and this is one of the main reasons for BTC to be a haven from inflation.
How Bitcoin as a legal tender could affect the crypto market if this solution is used more and more?
A lot of crypto projects were naturally tied to Bitcoin, and BTC has had an unstable path through history. Bitcoin as a legal tender turns on very quickly the accelerated stability and maturation of many crypto projects.
Sergey ArefevDirector
Can Bitcoin be the solution for inflation? Why?
Of course, btc can be seen as a remedy for inflation. After all, its final amount is known and over time, after the end of the extraction of the last btc, they will begin to become less and less and therefore it will only become more expensive!!!
How Bitcoin as a legal tender could affect the crypto market if this solution is used more and more?
Naturally, with the time of increasing recognition of btc as a legal tender, it will only grow as the demand for it will grow accordingly. And then there's a bunch of great altcoins!!!!
Blessing AlabiCrypto Enthusiast and Mathematician
Can Bitcoin be the solution for inflation? Why?
Yes, Bitcoin can be a solution for inflation. as we all know, in the world of digital currency today, cryptocurrency(Bitcoin) is taking the lead. Being a decentralised digital currency, Government cannot set a price control policy on it( meaning Government cannot control the price). This fact that government cannot control the price can make it become the solution for inflation.
How Bitcoin as a legal tender could affect the crypto market if this solution is used more and more?
If Bitcoin is a legal tender today, it will enable the people around the world to be able to buy and sell physical products easily with digital currency and this will yield a great increase and progress in the crypto market. As we all know that a rise in bitcoin enables rise in many altcoins.
James BarcusIT VP
Can Bitcoin be the solution for inflation? Why?
Simple logic would say yes. Simply because the value is not based on the government, or GDP of the country. It’s value will increase over time compared to their own currency which will decrease in value. This should provide an economic stability that would greatly assist growth and future prosperity.
How Bitcoin as a legal tender could affect the crypto market if this solution is used more and more?
The value of Bitcoin would continue to rise and become more stable. Crypto in general is a global economy where the whole world can help to determine its value. This can bring stability to many countries that need it. I also believe that it will aid in reducing corruption and economic dictatorships many governments use for control. It may actually give greater control to those who have large holdings in BTC which may prove to be as bad.
Summary
As you could probably guess, the opinions of experts are different in both topics. Talking about inflation we can't make clear predictions but the suppositions are worth reading.
There is a fixed amount of Bitcoin which allows circulation in the crypto market so the inflation won’t grow. Moreover, cryptocurrencies are not restricted by any government so the value of Bitcoin is equal in every county. That can be a milestone in online transactions. Also we need to remember that cryptocurrency has much volatility in price. This aspect makes Bitcoin a good store of value but not a payment method.
Predictions about the future of the cryptocurrency market are promising. Adopting Bitcoin on a large scale means enhancing swift international transactions, simplifying online transactions, or more stable and higher cryptocurrency value.
El Salvador, Argentina, and maybe other inflated countries can gain a lot if the government uses the possibilities of bitcoin wisely. Isolated cases of bitcoin adoption can make a difference in the cryptocurrency market. We can only observe the current situation and learn from it.
This is not a financial advice. Please do your own research and consider the risks of trading cryptocurrencies.