Coinbase, a historic US exchange with a presence in the crypto market and one of the few companies in the industry to be listed on the stock exchange, is enjoying the fruits of a bullish 2023.
The CEO of Coinbase, Brian Armstrong, tweets about the economic politics of South America, sparking controversy.
Coinbase is offering a helping hand to Latin America
Latin America is thinking about how to cope with continuing changes, including economic and geopolitical ones, in the global chessboard.
Brazil and Argentina, often rivals on a soccer field, are teaming up to study and create a common currency that will create one of the world’s largest united trading areas.
On 22 January, both Brazil and the newly crowned world soccer champions let it be known that they have begun talking to each other about adopting a common currency that will sit alongside both the Argentine peso and the Brazilian real.
When the two Latin countries reach an agreement, the second largest currency bloc will come to life.
Brian Armstrong, CEO of Coinbase, believes Bitcoin would undoubtedly be the best choice the two continental countries could make instead of racking their brains over the creation of a new digital currency.
The hypothesis floated by Coinbase’s top brass immediately made the rounds of the web and the world at large, giving rise to fervent debates on social media as well.
According to Armstrong, Bitcoin (BTC) would be the “best long-term bet,” and he wonders if this proposal will be accepted or at least considered in the appropriate venues.
The founder and also CEO of Global Macro Investor, Raul Pal is against what the CEO of Coinbase is suggesting and hoping for.
Pal believes that adopting Bitcoin as a parallel currency is inconvenient.
A currency that “decreases 65% in the downward part of the business cycle and increases 10 times in the upward part” is not the best a state can equip itself with.
Pal explained that with such a spread, businesses would have problems with planning but also with hedging.
A widely held view that is also echoed by most analysts is that Bitcoin is only suitable as a store of value in the same way as Gold.
In this regard, one user tweeted:
“Anyone who thinks #Bitcoin could ever be a substitute for fiat currency doesn’t understand what $BTC is.
The ONLY real-world use case that #Bitcoin can have: A store of value to back up the valuation of the currency, like gold used to be.
And this guy is the CEO of Coinbase. That says it all.”
Views however, as is often the case, do not follow a common flow.
One user is against the adoption of BTC proposed by the CEO of Coinbase on the grounds that transactions involving the digital gold would be too slow, but this is not reflected in reality, as one response immediately points out.
The BTC Lightning Network is the “best medium of exchange” and also fast enough according to insiders.
The example of El Salvador may be enlightening to understand what the adoption of BTC would look like and what it would entail.
El Salvador adopted BTC in 2021 and this has resulted in strong growth in tourism intrigued by testing firsthand what it would be like to live with Bitcoin “in your pocket.”
Moreover, the South American country, thanks to BTC has been able to build infrastructure such as schools, a veterinary hospital, and more.
Two months ago, the Brazilian Chamber of Deputies enacted the law protecting cryptocurrencies in current use in the country.
The regulation was subsequently signed in December and will go into effect starting next June.
A month and a half ago, Argentina also had a similar path to its Brazilian cousins.
One of Argentina’s provinces enacted a law allowing the minting of a stablecoin linked to the US dollar.
Developers and regional entities say the stablecoin will see the light of day soon, will be for the exclusive use of overage holders, and will have a 100% backing from provincial assets.
Source: https://en.cryptonomist.ch/2023/01/25/coinbase-analysis-economic-interference/