Brazilian and Argentine officials are exploring the idea of establishing a common currency. Coinbase CEO Brian Armstrong has recommended that they instead consider using Bitcoin. The idea has spurred debates regarding the possible advantages and disadvantages of utilizing Bitcoin as a national currency.
Coinbase CEO Recommends Bitcoin For Nations Considering A Common Currency
The CEO of Coinbase, Brian Armstrong, expressed on Twitter his opinion that Bitcoin would be a good long-term bet for the two South American countries currently looking at the idea of a common currency.
It’s possible that Brian Armstrong’s advice was inspired by the fact that El Salvador, a country in Latin America, formally recognized Bitcoin as a legal tender in 2021. In addition to other benefits, this decision resulted in over a million tourists visiting the nation in 2022, which was a substantial rise in tourism. El Salvador also used the money it received from its Bitcoin transactions to build schools and a veterinary facility.
El Salvador’s president said in November that his nation would buy one Bitcoin every day. El Salvador now has 2,518 Bitcoin, according to Nayib Tracker, a website that tracks the country’s Bitcoin holdings.
Coinbase CEO Lambasted For Advocating The Use of Bitcoin As A National Currency
For his suggestions on the talks between Brazil and Argentina on the potential for a shared currency, Brian Armstrong has come under fire on social media. The majority of the accusations leveled at Brian Armstrong center on how difficult it is to use Bitcoin for routine transactions due to its volatility.
According to renowned Bitcoin critic Raoul Pal, no country can currently have a national currency with 100% volatility that drops by 65% during a downturn in the economy and increases by 10x during a rebound. making it difficult for businesses to prepare for or protect themselves from these changes.
Brazil, Argentina Take Steps To Explore Common Currency
According to reports, officials from Brazil and Argentina will announce that the first phase of establishing a common currency will be released this week. The second-largest currency bloc in the world could be formed as a result of this move.
The Financial Times reports that during a summit to be held in Buenos Aires, Brazil and Argentina will discuss the idea of a common currency and invite other Latin American countries to join. They will also look at how this new currency, which Brazil has suggested calling “Sur,” could boost intra-regional commerce and reduce reliance on the US dollar.
Sergio Massa, Argentina’s economy minister, reportedly told the Financial Times that it has been decided to start looking at the conditions for a shared currency, including budgetary issues, economic size, and central bank operations. He continued by saying that the study’s main focus would be on strategies for trade integration. He highlighted that Latin America must go through a lengthy process, and he warned against setting overly great expectations on the idea.
