El Salvador, Dollarisation, and Bitcoin — What to Expect From Here

^ missed Norway

 

Could be, but left wing advocates like Howson, Ottenhof and Morozov are always going to push their anti-capitalist values.

And obviously there's a willing audience if the message confirms the reader’s confirmation bias.

 

The Salvadoran government will saddle future generations with more debt when they buy BTC as part of their plan to issue USD30 worth of the crypto to every individual in El Salvador. That's USD195 million injected into the Salvadoran economy paid for by the people which no doubt will eventually find its way into the accounts of corrupt politicians. Nice work, typical right wing politics, socialise your losses and capitalise your gains.

 

To a nation that has sovereignty over its currency it doesn't really matter (it does but that's more to do with resource constraints). To a nation that doesn't issue its own currency then debt is a huge problem, because when a country like El Salvador issues debt using another nation's currency, it is at the mercy of that country's central bank policy makers, in this case The Fed and it has to somehow find more USD than it borrowed to repay the loan with interest.

This is why the whole idea of legalising BTC as a currency in El Salvador is just one huge fraudulent joke.

 

I don't know much about Lebanon's economy but the first thing they need to do is create demand for their native currency. One suggestion I've read for EU nations that don't have sovereignty over their currency is to issue tax-bonds, they are sovereign bonds that can be used to offset a company's tax obligations in Lebanon or they can be redeemed like a traditional sovereign bond generating a return with interest, it would depend upon the economic conditions at the time.

El Salvador could do the same rather than legalising another currency over which they have no control.

 

I was thinking international companies. They would bring investment in to the country.

 

That’s why the government needs to incentivise its adoption. Anything else won’t work as it won’t enable Lebanon’s government and CB to retain control.

Then they’ve got the monumental task of rebuilding their trashed economy by ensuring that production meets demand. The resource constraints arising from the trashing of the economy is what creates inflation in the first place.

 

Taking off my "Rub Out Corruption In El Salvador" hat, according to stuff I've read, remittances contribute around 21% of total Salvadoran GDP per year. There are large fees associated with this and many Salvadoran's don't have easy access to banks and can put themselves at risk traveling to get deposits in USD that relatives in the US have made to their accounts.

Strike uses the Lightning Network and at the moment will take no fee for this enterprise. The plan is that Salvadoran remittances are made in USD, this gets converted into BTC and sent over the lightning network nearly instantly, where it's converted back into USD or whatever in the account of the receiver, who instead of having to travel many km along criminal infested roads, can get the funds safely into their possession, with minimal cost on a mobile wallet.

That bit sounds pretty good to me.