Coinbase CEO calls for Bitcoin legal tender for Brazil, Argentina – Reaction
As Brazil and Argentina began preparatory work for a potential common currency, Coinbase CEO Brian Armstrong floated the idea of the two countries moving to Bitcoin (BTC), sparking various discussions about the viability of BTC as a national currency.
On January 22, the two South American countries announced that they were beginning to prepare to create a common currency that would run parallel to the Argentine peso and the Brazilian real. The move could potentially create the second largest currency block.
When the news broke, Armstrong took to Twitter to suggest that BTC would be the “right long-term bet” and wonders if the two countries would consider it.
Global Macro Investor Founder and CEO Raoul Pal opposed the idea. According to Pal, it is not ideal to have a national currency that “falls 65% in the down cycle and rises 10x in the up cycle”. The manager pointed out that businesses would have difficulty planning and securing themselves in this situation.
A few community members supported Pal’s sentiments. According to one Twitter user, the only use case for BTC is a store of value, like gold. They tweeted:
Meanwhile, another Twitter user picked up the slow speed of transactions on the Bitcoin network and argued that they would take too long for everyday use. However, this was quickly countered by another community member who argued that with the Lightning Network, BTC becomes the “best medium of exchange.”
Armstrong’s proposal may be based on El Salvador, another Latin American country, recognizing BTC as legal tender back in 2021. The move brought various benefits to the country, such as an increase in tourism in 2022, with 1.1 million people visiting the country. In addition, El Salvador was able to build schools and a veterinary hospital using profits from its Bitcoin purchases.
Related: El Salvador’s Bitcoin Decision: Track Adoption a Year Later
Brazil and Argentina are no strangers to digital assets. On November 29, Brazil’s Council of Representatives approved a law legalizing crypto as a payment method in the country. Brazil’s president signed the bill into law in December, and it is expected to take effect in June 2023. While the new law recognizes crypto as a payment method, it does not make any cryptocurrencies legal tender in the country.
On December 16, a province in Argentina approved legislation to issue a stablecoin pegged to the US dollar. The token will be available to people over the age of 18 and will be 100% secured by the province’s assets.
