Bitcoin came into existence to point out the flaws in the current financial infrastructure. All of the world’s money is being issued and controlled by central banks, without backing up that paper money with anything other than a promise of value. This has lead to major economic issues in underbanked countries, such as Argentina for example. And it is exactly this country that is looking at Bitcoin in order to save their economy.
Argentina – Hyperinflation and Corruption
The story of Argentina’s economy is long and filled with many things that will surprise you. Over the past 75 years – and more – there has been nothing but macroeconomic policy mismanagement, at the expense of everyday people. To make matters even worse, the country’s economy is under heavy inflation, making the local currency worth less and less on a regular basis.
To give you an example, 100 Argentine Pesos equals to roughly US$11, according to the government, that is. But if you want to exchange Argentine Pesos to foreign currency on the black market, those prices will be vastly different. Needless to say, this creates a lot of financial unrest that is not benefiting the Argentine population by any means.
Granted, those who have money will have every opportunity to make even more money. Those who are already struggling to make ends meet will only face more difficulties to do so as time progresses. Considering how the government of South America’s third largest country is not willing or able to do anything about this situation, several Argentinians have been flocking to Bitcoin as a way out of this mess.
Exchange Argentine Pesos for Their True Value with Bitcoin
What may be holding back the growth of Bitcoin in underbanked and unbanked countries around the world, is the fact that you need to be somewhat tech-savvy in order to see the digital currency’s potential. Even though we have only scratched the surface of what Bitcoin technology can do, you don’t need to understand all of that in order to use it as a currency.
The more tech-savvy Argentines use Bitcoin to exchange their local currency for its actual value, and not the value dictated by the government. Bitcoin allows these people to bypass a corrupt financial infrastructure altogether. After all, the Argentine banks are working closely together with the government, forcing people to use the hyper-inflated and devaluing Argentine peso.
Even though you are correct in thinking that bypassing the banking infrastructure could be deemed illegal, there is nothing to worry about just yet in Argentina. Bitcoin broker Dante Castiglione told DigitaMoneyTimes that “the Argentine government has bigger problems to deal with than a handful of people using Bitcoin”.
As much as all of us would like to see Bitcoin take over entire nations and countries in order to become the “local” currency, that will not be happening any time soon. And, even if it did happen in a country such as Argentina, it woulf only be because the local government failed to work out beneficial economic policies.
“The Federal Reserve has no idea how much money is out there, at least in all its digital forms, or, how fast the overall supply is growing. This is alarming because the whole concept behind the Fed is to monitor and control the money supply.” The same can be said for any central bank in any part of the world, unfortunately. So, if you have ever wondered why we need alternative payments such as Bitcoin, that quote should satisfy your needs.
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