Kyle Torpey. “Hyperinflation in Venezuela: How Bitcoin May Help.” Inside Bitcoins.
The problem with the Venezuelan economy is that it has been collapsing for a long time so far. Bolivar, endemic currency, has lost in value so significantly that nowadays even the biggest bill in the Venezuelan system costs maximum sixty American cents. That is why the Venezuelan economy badly needs a boost.
Potentially a very good boost of Venezuelan economy may be introducing bitcoin. The idea is to trade bolivars to bitcoins and therefore reduce the amount of bolivars in Venezuela therefore increasing their value. However, there is an entire bunch of problems with it. Here they are, one by one:
Bitcoins may be recognized illegal in Venezuela and banned. Therefore, administrative measures of the Maduro government may make benefits from using bitcoin good for nothing.
Using bitcoin may lead to more criminal deals. Venezuela is known as a country with drug and other problems per se, trading all those things in bitcoins that are not controllable may only result in more shadow deals that affect both economic health and security of Venezuelans and Venezuela as a country.
Finally, the idea may turn out to be not so good because hardly there will be any buyers who would be ready to sell bitcoins and buy devalued currency in large masses.
“Bitcoin’s Capital Controls Resistance a Concern says IMF as $1 Trillion Leaves China.” Bitcoin.com.
The problem of China consists in the fact that it swiftly loses great amounts of money that are flowing from the country with cash. The Chinese government’s report has been traditional for Chinese political system – more administrative measures have been introduced and imposed to control the flow of money. The goal of this was to prevent further outflow of cash into the offshore zones. This gave the chance to Bitcoin to become more popular in China. The reason for this consists in the fact that bitcoin is a non-controllable currency, it cannot be overviewed by the government or by anybody else. That is why trickling Yuans into bitcoins may be a logical response of Chinese citizens trying to somehow preserve their money from the government’s interference.
However, the government also understands all the loopholes there are for citizens relating to bitcoins and other crypto-currencies. Therefore, the Chinese government has already introduced plans to elaborate its own crypto-currency or crypto-currencies the concept of which would be different from bitcoin in the part of it being untraceable and uncontrollable. The Chinese government plans these currencies to be subject to its regulation which undermines the very ideas of crypto-currencies as the currently are.
Of course, although a good option for citizens to preserve their resources bitcoins present its traditional concerns to them. First of all, bitcoin is a very good means of illegitimate (to put it mildly) deals the number of which will definitely increase once the practice of using bitcoin by the Chinese increases. Secondlly, the purely economic and financial damage of such illicit deals may spill over into the political field – extensive usage of bitcoins may lead to financing terrorism, laundering money and other such things.
Therefore, just like in any other country, bitcoin has its benefits and its drawbacks to suggest to China.
Works Cited
“Bitcoin’s Capital Controls Resistance a Concern says IMF as $1 Trillion Leaves China.” Bitcoin.com. 28 Jan. 2016. Web. 24 March 2016.
Torpey, Kyle. “Hyperinflation in Venezuela: How Bitcoin May Help.” Inside Bitcoins. 6 Dec. 2014. Web. 24 March 2016.
