Formal Bitcoin Adoption is turning into a Chance for Developing NationsJune 12, 2021
The common wisdom states that money begets money, which is something that is painfully obvious in the modern world. Today, practically any region of the globe, with the exception of things like the Scandinavian nations, includes numerous examples of extremely rich individuals only becoming more wealthy. This, in many ways, applies to institutions of all sizes, including the nation-state themselves. Because of this, the very unevenly distributed wealth of the globe and a badly distributed combined GDP are only pushing the world into bigger problems. These today transcend the issues that a single country or a smaller region might face.
Instead, the entire human civilization is under threat from things like global climate change and rising social instability. That set of problems in many ways drive from that faulty wealth distribution which continues unabated since the start of the Industrial Revolution, as well as the mass colonization and expansion of the Western imperial forces. Many countries are still locked in that cycle of poverty and lack of chances that began all those centuries ago. Yet today, as the example of El Salvador shows, there are other tools in the toolset of these underdeveloped and poor countries. One of them is the bitcoin network and digital currencies in general. Do these stand the chance to actually change the balance of power, even if only slightly, and thus provide some much-needed opportunities in places that are in dire, or even desperate need of them?
Lack of Opportunities
Like so many times in the modern geopolitical domain, it is hard to define the precise reasons why a country like El Salvador is in such financial ruin. In almost any aspect of politics or economy, it seems like any of its neighboring countries. Yet, all of them share the same level of almost utter and complete lack of opportunities. This applies to the entire state apparatus just as much as it applies to individual people and their lives. Because of that, the country is one of those huge exporters of immigrants to the Western nations especially the United States and Canada. All of them choose to leave El Salvador because they do not see any chance of improvement either in their personal life or on the level of the state.
Most likely believe that both are stuck in place as long as they remain in that geographical position. While individuals and families can move, it is impossible to move an entire country. So, the hardships and the constant drain of the working population seemingly continues to keep El Salvador down, just like its neighbors. In that state, it is easy to see why any alternative might be considered a chance that should be examined by the central government, including decentralized digital currencies.
Another big reason why a place like El Salvador would consider making bitcoin legal tender is the fact that it has no one else to rely on. International institutions have long ago failed developing countries in some regions, especially those that are of no huge geopolitical importance to the global superpowers. Many regions in Africa have known this fate for generations. Now, a similar trend is expanding across the globe and encompassing locations like many regions of South America, but also Southeast Asia and others as well. That is a clear signal to the local population, as well as local government. This signal states that they should and not count on any support either from organizations like the IMF or the World Bank.
The same goes for the backing of larger powers, both regional and global. None of them have any interest in a country like El Salvador. But, the same is not an obstacle for digital currencies. Instead, in many ways, it would even be an advantage to be on the periphery of world politics. With that position, the government of El Salvador is a lot more able to experiment with legislative concerts like adopting BTC token and equalizing it with any other fiat currency. Precisely this is what the president of El Salvador managed to do recently. Still, the end result of that experiment is nowhere close to being clear or even measurable in the near future.
Across the world, analysts and media pundits have been struggling to make sense of the El Salvador decision. After all, how could it or any other poor nation directly benefit from a move that basically fully legalizes the process of using digital currency? First of all, the concept here is that access to bitcoin actually provides semi-banking services to people who do not have any such physical businesses or access to them. While a person in the West just walks over to their bank, a person in a poor nation might need to spend a day walking to get there and then even find out they cannot access the same possibilities because of a complete lack of fiat savings.
With bitcoin, anyone can send their family money quicker and more effectively than using money wire services or anything else dealing in EUR, USD, or any other traditional currency. Also, the presence of these special circumstances will undoubtedly attract some level of investment from companies or the countries who make such a move. That might be development startups who want to have a hassle-free development ecosystem in terms of law or it might be mining companies who want to avoid possibilities like the Chinese scenario of the country turning their back to the same industry. All of these are more than important for El Salvador or any other impoverished nation.
Finally, in a world hooked on things like social media, esports, streaming services, and a 24-hour news cycle, it pays off to have any kind of varied coverage that is not simply about a country being poor. Sadly, there are plenty of those countries on the globe and all of them blend in the public consciousness in the more developed nations. For El Salvador, that narrative has been broken for at least a short while. The potential in that might be enough for any other nation in the same boat to decide to do something similar in the future.