El Salvador’s Bitcoin Policy Could Lead to the Change in the Global Monetary System – Simon Dixon
Well-known investor Simon Dixon recently described El Salvador’s Bitcoin policy as “very responsible” and said it could be the first domino to fall in bringing down the International Monetary Fund’s (IMF) “fiat-based Ponzi scheme” debt mechanism if successful.
Dixon summarized the world’s financial history to highlight that every financial crisis has led to countries falling into debt, turning all their economies into over-leveraged systems.
On the other hand, Bitcoin behaves like independent equity that can provide great returns. On a macro scale, investing in Bitcoin could provide a way out of the IMF leveraged debt cycle for countries.
Dixon said:
“Betting on a percentage of a country’s future is, I think, a completely responsible, not irresponsible strategy, and the IMF wants countries to follow irresponsible strategies of fiat-based Ponzi scheme debt.”
He went on to say that if El Salvador can play out its Bitcoin investment plan, it can pull out of the alleged Ponzi scheme.
Bitcoin as equity
Dixon described investing in Bitcoin as a deleveraging movement away from debt to equity. He said:
“[By] Equity, I mean, I was deep into trying to start a bank and then Bitcoin treated me well. I got rich because of Bitcoin.”
According to Dixon, investing in Bitcoin is accompanied by an increase in wealth due to the inevitable increase in Bitcoin’s value. The increased wealth leads to spending more, which ultimately supports the sovereign economy of Bitcoin. Meanwhile, investing in the fiat system results in wealth declining over time. The economic loss forces fiat investors to leverage assets and liabilities.
By that logic, Dixon also argued that central bank digital currencies (CBDCs) would only bring the IMF’s debt-based Ponzi schemes into the digital platform since it will ultimately be tied to the IMF’s rules. He described the CBDCs as “debt-free money issued by a central bank” and a “speculative attack on fractional reserve banking.”
Following El Salvador to Get Out of IMF ‘Ponzi Scheme’
Looking at the historical milestones and the current economic system situation, Dixon said countries could borrow from the US, the IMF or China to finance their nations. Also, even if a government chooses to borrow from the US or China, it will still be borrowing fiat money that is ultimately tied to IMF control.
Dixon argued that the IMF did not like it when El Salvador made Bitcoin their legal tender because the possibility that they could build an economy around Bitcoin posed a serious threat to the IMF’s current system.
Dixon said:
“If [El Salvador] succeed, this is a major problem for the business model of the IMF. They are not a rescue company, they are not a mechanism for developing the world.”
He continued:
“They are a mechanism to dollarize the world and implement a global central bank digital currency on top of their special drawing rights so they can maintain control of their mechanisms.”
El Salvador is currently undergoing restructuring. They are trying to build a sovereign economy that provides an increase in value, unlike the fiat-based investment options, and is free from the IMF debt cycle.
El Salvador’s Bitcoin Policy
El Salvador became the first country to accept Bitcoin as legal tender in December 2021 and has accumulated over 2,300 Bitcoins since then. Based on the price movements, the country saw short-term losses and gains.
The IMF has been against El Salvador’s decision to adopt Bitcoin as legal tender. Also, the country’s current Bitcoin reserves are worth a little more than $50 million based on current Bitcoin prices, which the IMF is leveraging to urge El Salvador to drop its Bitcoin policy.
Regardless, El Salvador is keen on its Bitcoin-centric financial system and is convinced that prices will rise to higher levels than before. The county also influenced the Central African Republic (CAR) to adopt Bitcoin as legal tender.
