Entire industries have sprung up to serve this untethered generation – borderless digital banking, tailored nomadic travel insurance, coworking and co-living communities and even eco-hotels for the eco-conscious seeking work-life balance.
Those jurisdictions that fail to attract freedom-loving global citizens will lose out. How then does a small country or region compete in this environment? How can it stand out?
Estonia Digital Experiment
Let’s look at the small Baltic nation of Estonia in the year 2000 when it too was trying to stand out and jump out of its post-Soviet economic stagnation. The vision was bold: to become the world’s most advanced digital nation. The transformation was rapid – and now, with services such as e-Health, e-Police, i-Voting, e-Residency and e-Tax, you can apply online for almost any service, plus vote for your favorite politician. Marrying or divorcing is the only decision in life that is considered so consequential that it requires face-to-face mediation (lest the ritual be unduly trivialized, perhaps).
Now a model for many nations, Estonia succeeded because a young breed of leadership emerged, took risky, bold steps and moved quickly. Today, we can look to El Salvador and even the Madeira archipelago for the next generation of digital innovations.
Madeira Bitcoin Project
About 1,000 kilometers away from Lisbon, Portugal, Madeira has become a digital nomad hotspot, thanks to the work of some entrepreneurial locals. In May 2022, president Miguel Albuquerque convinced the bitcoin community that he was serious about developing the bitcoin ecosystem in the islands.
Speaking about the Madeira project at the conference, entrepreneur Jeff Booth pointed to governments’ exploding national debt and the possible default of fiat currencies as a good enough reason to start courting bitcoin.
“When the system breaks down, governments will be faced with choices, and they’re going to ride the fiat horse or the Bitcoin horse, and for a while they’re going to have to ride two horses, and then they’re going to have to choose.” -Jeff Booth
Image source: Bitcoin Amsterdam
The Madeira Bitcoin Experiment with André Loja, Knut Svanholm, Jeff Booth, Troy Cross and Daniel Prince
Link to embedded video.
Bitcoin adoption hours
So, what lessons can we draw from the current bitcoin initiatives? Here are some ideas a careful listener might have overheard among the swarming enthusiasts in Amsterdam.
Governments must have a bold vision. El Salvador, for example, plans to launch a $1 billion bitcoin bond project. It is building a Bitcoin City – no income tax, no property tax, no payroll tax and it has volcano powered bitcoin mining infrastructure.
As the story of El Salvador shows, technical clichés are common, especially during initial deployments. They will be fixed.
Conduct patient education across a broad spectrum of the population. Arm the vulnerable with knowledge, for example against malicious phishing attacks.
The use of Bitcoin will not be overnight in a nation where cash has always been king. It’s a long way.
Encourage, encourage. El Salvador famously gave a gift of $30 in bitcoin — a three-day minimum wage — in each new wallet.
Be honest about risks, such as bitcoin’s volatility versus fiat currencies.
Find a magic recipe for reconciling bitcoin’s decentralized philosophy with a need for centralized government’s strong push for the necessary legislative and structural changes.
Be prepared for some strong objections from the likes of the IMF and the World Bank. They will be less than thrilled when governments diversify away from fiat currencies.
Articulate concrete benefits from bitcoin adoption and sing its praises to the world.
Business case one: Bypass bank fees on remittances. Each year, El Salvador receives foreign bank transfers totaling $6 billion. Take Mexico, where annual remittances are $51.6 billion. By switching to bitcoin and sending it over the Lightning Network, the nation could keep about $2 billion instead of giving it to Wall Street. Any country can save money transfer fees, both senders and receivers.
Business case two: A hedge against inflation. With an inflation rate of 81.22% in 2022, Turkey is an ideal case for diversifying into bitcoin. And the Turks know it – the country ranks fifth in the world in terms of cryptocurrency ownership rates.
Bitcoin remains the world’s most popular cryptocurrency. Governments everywhere would be remiss to overlook the benefits of bitcoin adoption.
Sometimes historic movements start small, be it on a beach in El Salvador or with initiatives like Bitcoin Beach Brazil and Bitcoin Jungle Costa Rica. They indicate what is to come. Want to ride this cheerful orange wave too?
Asked what it would take for other governments to carry out a technological and economic transformation on the scale of El Salvador’s, Ambassador Landaverde said, without hesitation, somewhat humbly: “When you dream it, there is a will.”
This is a guest post by Nazar Taras. Opinions expressed are entirely their own and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.
