There have been a lot of discussions lately surrounding how cryptocurrencies help to improve the financial future of individuals. These unique digital assets provide more efficiency, transparency, and flexibility than centralized fiat currencies. Additionally, they are free from the bad monetary policy that have plummeted the value of fiat currencies to 40-year lows.
While all of this focus has been placed on cryptocurrencies on an individual level, there is a growing interest in how these digital assets can benefit entire countries. From providing relief from inflation to opening up alternative trade routes, cryptocurrencies are helping countries secure their independence at a record pace. Here’s how cryptocurrencies help countries find more freedom.
Global Economy is Mob Ruled
When you think of the global economy, do you envision a coalition of nations working together to facilitate open trade? While this sounds good on paper, the reality is much different. The global economy is run by a small group of nations that control the vital aspects of the market such as the SWIFT financial service and lines of credit. These nations use their positioning to economically depress competition and stifle those who oppose their policies.
The Weaponization of the Dollar
Countries that disagree with those in power can find out very quickly that they are not considered equal on the economic stage. There are multiple instances where entire countries have banned vital industries from countries sanctioned under the guise of humanitarian or political concerns. In most instances, the real motivation behind these maneuvers is to maintain a competitive edge and control over the global economy.
The concept of using economic ties to damage your opponents and stifle opposition isn’t new by any means. One can simply look through history to see examples of the global economy being turned against countries. Economic warfare is nothing new and has come in many forms with some more disguised than others
A perfect example of this is Haiti. Haiti was the first country to achieve freedom in the new world. When the freedom fighters there kicked out their French overloads and retook their island, they had no idea that the battle had just begun.
Early Examples of Weaponized Economies
Fast forward a couple of hundred years later and Haiti is one of the poorest countries in the western hemisphere. Do you think that is a coincidence? No, Haiti has been economically depressed ever since it managed to achieve freedom from Europe. The price of freedom is steep.
Today, the same tactics are in use, albeit in updated ways. For example, one can look at Puerto Rico as the perfect example of how relying on another nation’s currency can lead to disaster. The tiny Caribbean island of Puerto Rico has been occupied by foreign governments for +500 years. First, the Spaniards ruled the island and then the USA claimed it as a spoil of the Spanish-American war.
Puerto Rico Adopts the Dollar
Puerto Rico adopted the US dollar as part of the process. What the average Puerto Rican was unaware of is how difficult it would be to break this relationship at a later date. They didn’t realize that the US can just print up more fiat currency to buy the island up, much like what was done to Hawaiians in the mid-1900s.
Today, Puerto Rico is $ 90 billion in debt thanks to the decision of the US-backed government. Sadly, this debt is mostly illegal as it was issued on top of other debt in the form of bonds. To better facilitate the repayment of these bonds, the US government appointed a financial board. This board sits above the publicly elected government of the country and has the power to veto or block legislation passed by the Puerto Rican people.
Now What?
The current state of the island says it all. Puerto Rico is in debt and large public services such as the electric company have been sold or leased to the private sector to cover these obligations. Additionally, the people’s dependency on the dollar has made it nearly impossible for opposing views to gain traction on the island of +3 million citizens that can’t vote.
How Cryptocurrencies Can Help
The recent adoption of Bitcoin by El Salvador paves the way for the next step in hyper-Bitcoinization. Already El Salvador has seen some considerable gains in its holdings. The country decided on a way to help its citizens combat rising inflation.
Inflation is on the rise across the globe as governments have printed billions in COVID-19 relief. According to recent statistics, nations like Germany and the US have hit 40-year highs in terms of inflation. Prices are on the rise for everything from food to energy.
A Ray of Hope
For colonies like Puerto Rico and Guam, cryptocurrencies may be their last chance to secure independence. The integration of blockchain technologies into these societies on a larger scale will help to provide the community with more secure and low-risk passive income opportunities.
Features like staking, high-yield savings accounts, and more enable traders to earn rewards without giving up ownership of their assets. As such, they are powerful wealth-generation tools that require very little funding and technical knowledge to utilize. As such, DeFi platforms like META 1 continue to grow at a record pace.
Governments Know this
Recently, India’s president announced a campaign against these decentralized assets. He is attempting to make cryptocurrencies illegal while at the same time stealing their technology to launch a CBDC (central bank digital currency). CBDCs are like crypto but they are centrally controlled. They are designed to complement a fiat currency rather than compete against it. As such, they provide countries with sweeping new monitoring capabilities and censorship powers.
Crypto-Friendly Countries
One of the best things you can do to further your understanding of the crypto market is to get a better grasp on what countries are pro cryptocurrencies. There are a lot of countries that have stated they plan to regulate cryptocurrencies. Interestingly, this maneuver has proven to be a double edge sword.
You can look at nations like China that took a hard-line stance on cryptocurrencies by banning local exchanges and most operations. This decision led to Hong Kong receiving a boost in crypto funding almost overnight. On the flip side, positive and well-thought-out crypto regulation helps the industry to grow. Here are the top crypto-friendly countries at this time.
El Salvador
El Salvador is on the top of the list for many reasons, The country was the first in the world to recognize Bitcoin s legal tender. There is an area in the country dedicated to cryptocurrencies called Bitcoin Beach. The project started as a concept and eventually led to a nationwide effort to educate the masses about cryptocurrencies.
El Salvador has a large Bitcoin reserve and continually buys the dip. The nation’s president, Nayib Bukele is a long time Bitcoin supporter. He has been instrumental in driving Latin American crypto adoption. Notably, the nation gave every citizen $60 in Bitcoin via a lightning network-enabled wallet as a part of the educational process.
Portugal
Portugal is next up on the top crypto-friendly country. The nation has taken some impressive steps to help cultivate a healthy crypto community For example, the sales and purchases of crypto are tax-free. You can even convert crypto to fiat directly tax-free.
Notably, many analysts consider Portugal to be the most crypto-friendly nation in Europe. Data reveals that there has been a sudden uptick in crypto migration to the region thanks to the new laws. Additionally, Portugal is known for its excellent healthcare which could be another reason why so many crypto users have made it home recently.
Malta
Malta is considered a pioneer in terms of crypto adoption. The small island has blossomed into the epicenter of crypto activities. Malta is home to some of the largest crypto en changes in the game including Binance. Notably, Malta surpassed all other nations in terms of trading volume and remains a hot spot for startups
Malta has pro-crypto legislation and the island regularly invites blockchain startups to its shores. The combination of these factors and its overall pro-crypto stance has made this island one of the most recognized countries in the crypto sphere. Notably, Malta has taken a more lenient approach in terms of regulation which has helped the industry drive innovation.
Switzerland
Switzerland remains a financial powerhouse in both centralized and decentralized economies. The country features high privacy and regulations that have helped firms gain access to traditional backing. Switzerland enacted pro-crypto regulations and has seen a boost to its local economy due to new projects.
The country remains ahead of competitors with its forward thinking. For example, there are crypto mining regulations in place. These mining regulations benefit long-term holders and provide direct incentives for nodes. When you combine these aspects with Switzerland’s history of financial privacy, there are plenty of reasons why a person would want to take their crypto trading career to the Alps.
How Safehaven Assets Could Benefit Countries Moving Forward
The introduction of safehaven assets presents new opportunities to countries interested in digital assets. Safehaven assets decouple from the volatility of the traditional crypto market. They are next-generation stable coins that combine the stability of assets like gold with integrated smart contracts designed to protect the community.
Safehaven assets enable developers to add extra protections against risks like whale manipulation; For example, the META 1 Coin requires all users to prove they are humans. The goal of this system is to prevent trading firms, creations, and governments from infiltrating the community-led project.
META 1 Coin users are protected against whale manipulation by a token limit as well. This mechanism limits individuals to $5M in META 1 Coins at this time. This amount was determined as the maximum that a person could poses before they could alter the value of the token if they sold all of their assets.
Stability Requires More than Reserves
The developers behind META 1 Coin took the extra steps of integrating asset value protections. This system scans the blockchain for sales and then cross-references the value against the current asset value o the token. The system will deny any sales that fall below asset value. This structure is ideal because it prevents dumps.
Provide Real Wealth to Citizens
A country could adopt a safehaven token like Meta1 and provide citizens with a way to escape inflation and generate wealth. META 1 Coin was designed to appreciate alongside a basket of gold-related reserves. This structure means that token holders can avoid inflation currently crushing fiat savers.
Generate Returns Safely
Additionally, the best safehaven projects offer DeFi functionalities. For example, you can secure 10% APY using the META VAULT High Yield Savings account feature. This digital bank account doesn’t require your personal data to use and it pays out much higher than any local branch. The META VAULT pays 10% APY versus your bank’s 0.03%.
The Integration Could be Seamless
Perhaps one of the biggest reasons why a country should recognize safehaven assets as legal tender is that the integration could be seamless. Projects like META 1 Coin offer debit cards to users. These cards automatically convert META 1 Coins into fiat currency at the time of purchase.
This strategy enables anyone to spend their crypto at their favorite on and offline retailers. The project partnered with MasterCard to make the concept a reality. As such, you can use the card anywhere that accepts MasterCard globally. The best part is that the process operates just like a normal debit card. The vendor receives fiat currency and the transactions take seconds.
Cryptocurrencies Provide Relief
Nations like Puerto Rico are at a crossroads. They can continue to be left out of the centralized economy by legislation that limits their exposure to foreign markets or make a change. Now that El Salvador has set the pace for a new financial arms race where freedom is the prize, you can expect to see other countries follow in its footsteps.