As Brazil and Argentina began preparatory work for a possible non-unusual currency, Coinbase CEO Brian Armstrong floated the idea of either country switching to Bitcoin (BTC), prompting discussions about BTC’s viability as a national currency.
On January 22, the two South American countries announced that they were initiating agreements to create a non-unusual currency parallel to the Argentine peso and the Brazilian real. This move could create the largest currency bloc of the moment.
When the news broke, Armstrong took to Twitter to recommend that BTC would be the “right long-term bet” and wondered if the two countries would do it.
The founder and CEO of Global Macro Investor, Raoul Pal, opposed the idea. According to Pal, having a national currency that “falls 65% in the decreasing component of the business cycle and rises 10 times in the bullish cycle” is not ideal. The executive would find it difficult for corporations to plan and protect themselves in this situation.
Some members of the network supported Pal’s sentiment. According to a Twitter user, the use case for BTC is a store of value, just like gold. They tweeted:
Anyone who thinks #Bitcoin can ever be a fiduciary replacement does not perceive what $BTC is. The CEO of @coinbase ♂️Array Everything says. https://t. co/4AvwwmfIRv
Meanwhile, another Twitter user referred to slow transactions on the Bitcoin network and argued that they would take too long for daily use. However, this was temporarily countered by another member of the network who argued that with the Lightning Network, BTC becomes the “best medium of exchange. “
Armstrong’s suggestion would possibly be based on El Salvador, another Latin American country, which considers BTC as legal tender in 2021. This resolution has brought benefits to the country, such as an increase in tourism in 2022, with 1. 1 million other people visiting the country. country. In addition, El Salvador was able to build schools and a veterinary hospital thanks to profits from its Bitcoin purchases.
Related: El Salvador’s Bitcoin Decision: Adoption Followed a Year Later
Brazil and Argentina are no strangers to virtual assets. On Nov. 29, Brazil’s Chamber of Deputies passed a law legalizing cryptocurrencies as a payment method in the country. Brazil’s president signed the invoice in December and it is expected to take effect in June 2023. Although the new law recognizes cryptocurrencies as a payment method, but it does give legal tender to cryptocurrencies in the country.
On December 16, a province in Argentina passed the law to factor a stablecoin pegged to the U. S. dollar. The token will be available to Americans over the age of 18 and will be one hundred percent secured through provincial assets.