Coinbase CEO Brian Armstrong tweeted that BTC could be the “perfect long-term bet” for those currently looking for a common currency for South America.
As Brazil and Argentina began gearing up for a potential common currency, Coinbase CEO Brian Armstrong pitched the idea of moving to bitcoin to both countries
, sparked various discussions about the viability of BTC as a national currency.
On Jan. 22, the two South American countries announced they would begin preparations to create a common currency that would circulate parallel to Argentina’s peso and Brazil’s real, a move that could potentially create the second-largest currency block.
As the news broke, Armstrong took to Twitter to suggest that BTC would be the “right long-term bet” and wondered if the two countries would consider it.
Raoul Pal, founder and CEO of Global Macro Investor, opposed the idea. The executive said that according to PAL, having a national currency that “declines 65% in the downstream part of the business cycle and increases 10 times in the upcycle” is not ideal and businesses will find it difficult to plan and hedge in this situation.
Pal’s sentiments were seconded by several community members. According to one Twitter user, the only use case for BTC is as a store of value like gold. They tweeted:
Meanwhile, another Twitter user argued that it would take a long time to use on a day-to-day basis, bringing out the slow speed of transactions on the Bitcoin network. But this was quickly responded to by another community member who argued that electricity networked BTC would make a “better medium of exchange”.
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Armstrong’s suggestion may be based on another Latin American country, El Salvador, which recognized BTC as legal tender in 2021. The move brought various benefits to the country, such as increased tourism in 2022, Where 1.1 million people are leaving the country in addition, El Salvador was able to use the profits of its Bitcoin purchases to build schools and veterinary clinics.
Related: El Salvador’s Bitcoin Decision: One Year After Adoption |
Brazil and Argentina are no strangers to digital assets. On November 29, the Brazilian Chamber of Deputies approved a law legalizing crypto as a form of payment in the country. Brazil’s president signed the bill in December, and it is expected to take effect in June 2023. The new law recognizes crypto as a method of payment, but legal tender to any cryptocurrency within this country does not give
On December 16, an Argentine province approved a law to issue a fixed currency pegged to the United States dollar. The tokens will be available to people over the age of 18 and will be 100% collateralized by the province’s assets.