Are cryptocurrencies a cure for inflation?

Iran, Turkey and Venezuela. What connects these three countries? Citizens or governments of these countries want to save themselves from inflation going towards cryptocurrencies.

Iran creates its own cryptocurrency?

Over there citizens are trying to save themselves from inflation. And actually its kind with the prefix “hyper”. Rial already reached the level of annual inflation at the level of 127 percent on July 2. It should not be surprising that the inhabitants of Iran began to escape into cryptocurrencies. Transferring your savings to a market with a bear market may seem irrational. It is worth noting, however, that it is not as severe as the declines in Iran’s national currency.

In response, the Iranian authorities declared war on BTC and its derivatives. Currently, they block websites on digital currencies. In December 2017, the Iranian anti-money laundering body forbade public and financial institutions to use cryptocurrencies such as bitcoins. The Central Bank of Iran can not “take any action to promote” digital currencies, and in May 2018 Mohammad Reza Pourebrahimi, head of the parliamentary economic committee, warned those investing in cryptocurrencies. He claimed that they harm the national economy.

What is worth emphasizing, Iran’s problems are not the result of irresponsible government social policy and money printing, but the result of US economic sanctions. Therefore, the Central Bank of Iran together with domestic technology companies works on its own cryptocurrency. A new digital currency supported by a cryptic system using Blockchain technology is expected to see the light of day up to three months. Why, however, has its own cryptocurrency been handed over to Iran? Of course, to avoid sanctions! This is not an original idea.

Petro the lifebuoy of Venezuela?

The President of Venezuela, Nicolas Maduro, proudly announced that Petro – the Venezuelan cryptocurrency – would become a payment unit throughout the country. According to the Venezuelan leader, Petro and the new currency – Sovereign Bolivar – are to guarantee “a significant improvement in employees’ income” and “reach the maximum retail price”. From August 20, the country will have two currencies: Petro and Sovereign Bolivar. Sovereign Bolivar will “take five zeros” to Bolivar Fuerte, the current currency.

Telenovela from Petro has been going on since February, when pre-sale of cryptocurrencies took off. Interestingly, this digital currency is supported by the value of oil that is owned by the state. It is also an attempt to overcome the economic sanctions that have been met by Venezuela from the US, as well as the escape from the hyperinflation of Bolivar Fuerte, which in 2018 amounted to 1,000,000 percent.

Citizens of Turkey prefer Bitcoin

The situation in Turkey presents a completely different face of the problem. There, on August 11, the lira dropped by 13% in one day, and in general by 45% in comparison with 2017. What, then, do the citizens of Turkey naturally do? They are looking for alternative means of payment. And they find bitcoin.

Citizens of Turkey prefer Bitcoin

The situation in Turkey presents a completely different face of the problem. There, on August 11, the lira dropped by 13% in one day, and in general by 45% in comparison with 2017. What, then, do the citizens of Turkey naturally do? They are looking for alternative means of payment. And they find bitcoin.

https://twitter.com/CobraBitcoin/status/1029074284193488896

@CobraBitcoin writes about the large jump of bitcoin.org users among Turks. Although today his opinion about “taking over the world” by BTC may seem exaggerated, the phenomena described above show how cryptocurrencies can realistically save people from the problems of inefficient fiduciary systems.

The question is whether in the case of high inflation of currencies such as the dollar or the euro (pushing aside the divagation or their collapse is real), such a scheme (ie escaping into cryptocurrencies) is possible, it remains unanswered. What kind of opinion do you have?

@CobraBitcoin writes about the large jump of bitcoin.org users among Turks. Although today his opinion about “taking over the world” by BTC may seem exaggerated, the phenomena described above show how cryptocurrencies can realistically save people from the problems of inefficient fiduciary systems.

The question is whether in the case of high inflation of currencies such as the dollar or the euro (pushing aside the divagation or their collapse is real), such a scheme (ie escaping into cryptocurrencies) is possible, it remains unanswered. What kind of opinion do you have?

 

image: Pixabay.com

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