Recently, Coinbase Co-Founder and CEO Brian Armstrong commented on a report by the Financial Times (FT) about Brazil and Argentina starting “preparations for a common currency.”
As you may know, on 5 June 2021, Zap Solutions (a Bitcoin payments startup that uses the Lightning Network) Founder and CEO Jack Mallers announced at Miami’s Bitcoin 2021 conference that El Salvador’s government wanted to pass legislation to make Bitcoin legal tender (alongside the U.S. dollar).
During his talk, an emotional Mallers presented a recorded video message from President Bukele and read out a small passage from the proposed bill. Mallers went on to say that his firm would be opening an innovation center in El Salvador with the help of Blockstream.
On 9 June 2021, this proposed bill got passed by the Legislative Assembly (with 62 out 84 voting in favor of it).
Then, on 25 June 2021, Reuters published a report that said El Salvador President Nayib Bukele had announced during a national address on 24 June 2021 that “Bitcoin Law” would become effective on 7 September 2021.
On 6 September 2021, President Bukele announced that his country had bought its first 200 bitcoins, and they planned to buy “a lot more.”
El Salvador has just bought it’s first 200 coins.Our brokers will be buying a lot more as the deadline approaches.#BitcoinDay #BTC🇸🇻
— Nayib Bukele (@nayibbukele) September 6, 2021
Since September 2021, El Salvador has made 11 purchases of Bitcoin, with the country estimated to have bought a total of 2,381 bitcoins. The last $BTC purchase occurred on 30 June 2022, when El Salvador bought 80 coins at an average price of $19,000.
On 22 January 2023, FT reported that “Brazil and Argentina will this week announce that they are starting preparatory work on a common currency, in a move which could eventually create the world’s second-largest currency bloc.”
The report went on to say:
“South America’s two biggest economies will discuss the plan at a summit in Buenos Aires this week and will invite other Latin American nations to join. The initial focus will be on how a new currency, which Brazil suggests calling the ‘sur’ (south), could boost regional trade and reduce reliance on the US dollar… It would at first run in parallel with the Brazilian real and Argentine peso.“
Argentina’s economy minister Sergio Massa told the FT:
“There will be . . . a decision to start studying the parameters needed for a common currency, which includes everything from fiscal issues to the size of the economy and the role of central banks… It would be a study of mechanisms for trade integration… I don’t want to create any false expectations . . . it’s the first step on a long road which Latin America must travel.”
Based on the following tweet by the Coinbase CEO, he seems to believe that these two countries should follow in the footsteps of El Salvador and make Bitcoin legal tender:
Currently no one can have a national currency with 100% volatility that declines 65% in the down part of the business cycle and rises 10x in the up cycle. Businesses struggle to plan or hedge that.
— Raoul Pal (@RaoulGMI) January 23, 2023
Featured Image via Pixabay
This article has been originally published at: https://www.cryptoglobe.com/latest/2023/01/coinbase-ceo-thinks-brazil-and-argentina-should-consider-moving-to-bitcoin/