Bloomberg wrote last month that Venezuela is playing with the idea of having the central bank of the country hold Bitcoin and Ether as reserves. And actually that is quite a rational step for this struggling country.
Venezuela is (rightly?) In the corner where the blows fall. They are completely cut off from the global financial system. The United States does not do business with the country and they cannot use the US dollar. In addition, the US has threatened to stop trading or to impose fines on anyone who does business with Venezuela.
Because of this situation, the country must look for alternative methods of doing business. For example, they recently concluded a deal worth 637 million euros, which means that oil sales to China can continue. The condition? They are paid in Chinese Yuan instead of US dollars. This reduces their ability to do business with other countries, since not every country in the world uses the Yuan.
Now it looks like Venezuela will use bitcoin and ether as potential payment methods, they also want to include this cryptocurrency in their national reserves. Investor Anthony Pompliano thinks there is more to it:
According to Pompliano, this last point is important. It is quite something if a country specific invests in the bitcoin and ether infrastructure. He therefore doubts whether Venezuela is the only country. An American lawyer once said that since 2012 his office has started bitcoin itself with minen to use in criminal investigations. In addition, there are rumors that North Korea, Iran, China, Russia and others are also bitcoins.
For many Westerners, that list can sound rather scary. All countries with dubious agendas in our eyes. That is not surprising, countries, but also companies and individuals (such as criminals) in the margin are the first to be open to new technologies. Consider how drug traffickers were the first with a beeper and cell phone. And how bitcoin became popular on Silk Road.
Pompliano says that we don’t have to worry about this and don’t forbid bitcoin ownership. Check out: the same protocol that we use to read this page (internet) is also used by Venezuela, North Korea, Iran, China, Russia and many others. There is no difference between the public protocols of the internet and the public protocol of bitcoin.
The world is changing fast. The macro-economy and geopolitical issues affect our beloved technology. And as a follower of bitcoin (and if you follow bitcoin you will automatically be sucked into the rabbit hole of the sense and nonsense of fiat money) this complexity is very interesting.
Pompliano decides that Venezuela appears to be the first country to include bitcoin in their central bank reserves, more to follow. It is a matter of time before other central banks follow.
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