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How Bitcoin Will Promote Latin American Growth

While there has been a lot of hype surrounding Bitcoin and how Chinese and US authorities and companies are responding to it, there are even more interesting possibilities for this currency and other cryptocurrencies.

By Bhagirath RoyPublished about a year ago 7 min read
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How Bitcoin Will Promote Latin American Growth
Photo by Traxer on Unsplash

The Wall Street Journal published an article a week ago about the apparent divide that exists in Latin America. Atlantic countries have more command-oriented economies, while Pacific countries, except Ecuador and Nicaragua, have more market-oriented economies. Latin America has become an important continent on a global scale, Europe's growth is slowing, and the Asia-Pacific region is already joining the global economic conversation. Alternative currencies will shape Latin America and affect both sides in different ways. Ultimately, Bitcoin and Latin America's growth are in the spotlight together, and cryptocurrencies (including Bitcoin) offer Latin American companies and entrepreneurs the opportunity to do business on an equal footing with the rest of the world. So it will harmonize.

Latin America's Prominent Nation-Oriented Economies

Ecuador

Bolivia

Cuba

Brazil

Argentina

Nicaragua

Venezuela

These countries have economies that focus on national interests. The most extreme state-owned economy on this list is Cuba, where the communist regime has made modest concessions to economic liberalization. Venezuela, perhaps the world's second-largest state-owned economy, is in the midst of a socio-economic and political crisis. Argentina, courtesy of President Cristina Fernandez de Kirchner, has been plagued by instability and special forces-led turmoil, including price controls, drama over ownership of the Falkland Islands, 26% inflation, police strikes and the nationalization of the RPF. It has accounted for a significant proportion of economic events. . Brazil has always been feared of returning to its old ways, and still has a lot of bureaucracy and taxes relatively higher than in other countries. Mexico

Colombia

Panama

Chile

Peru

Belize

Digital and Technology - Just like Bogotá is an established business city in Colombia and Medellín has created a youthful digital force in the universe. Mexico is currently the 14th largest economy and growing. It is still plagued by drug cartels as demand for drugs spreads beyond its northern borders. Ciudad Juárez is plagued by antitrust violence, and the college bowl games were an opportunity to boost tourism and business in both El Paso, Texas and Ciudad Juárez, so the Sun Bowl was a great opportunity for visitors to reach the border. It is said to have been urgently discouraged from traveling across the

Colombia is still fighting the FARC, but has clearly won the battle since Urine took office. FARC was confined to the jungle regions of Colombia. In some cases, even aggressive peace talks are being negotiated with the FARC. The Colombian economy has plenty of room for growth in agriculture, energy, finance, tourism and digital technology.

Belize actively encourages Americans to buy real estate in the country with its pristine beaches, tax system and English proficiency. Belize has a lot to do and needs to shake off its stigma.

Chile is ranked #1 for economic freedom in Latin America by the Heritage Foundation. Chile enjoys a trade surplus and the central bank's policy rate is her 4.5%, making it attractive to investors outside Chile. Trading the Chilean peso can be a worthwhile venture for those looking to use the carry trade against countries/economies with very low interest rates such as the United States, European Union, Japan, etc. Chilean Inflation Rate is low, and the policy will not only benefit copper exports, but also help other exports maintain surpluses. Morgan Stanley expects Chile, Peru, Colombia and Mexico to grow by an average of 4.25% in 2014.

These countries are not facing looting or fighting over toilet paper, nor do they have leaders willing to escalate their actions against other countries.

Bitcoin's impact on state-oriented economies

All of these state-oriented economies have currency controls

Venezuela and Argentina are notorious for price controls. The Brazilian government's influence over the economy stems from its excessive influence, possible corruption problems, and inflation concerns. Entrepreneurs, investors and ordinary individuals look to the market for their needs. Rationing, bureaucracy, high costs, and possible oversight are inherent in these state-oriented economies. Bitcoin and cryptocurrencies will meet the needs of many people with internet access.

Global competition in countries that want to be more, You can get the goods and services you need at prices that are strong. Venezuela's can buy toilet paper from foreign sources without having to spend a heavily depreciated currency. Venezuelans also have the option of conducting business while in Venezuela, funding their efforts and possible migration to other countries such as Colombia. Over 26% of Venezuelans use the internet daily. Venezuela has not yet filtered the internet, and buying bitcoin is much safer than sticking with the bolivar.

The use of Bitcoin could take away the government's strict control over the economy and render its existence obsolete through the launch of a private currency. Fewer tax revenues to collect, people literally armed themselves financially (could have bought anything on the Silk Road), and less influence from political leaders and enforcers as the use of cryptocurrencies spread rapidly. Increase. This thought process can be applied to Venezuela-Light-Argentina, an economy of many possibilities.

Brazil's economy can continue to grow by increasing the presence of companies abroad and by overcoming the problems of an exotic national currency. The 2014 World Cup and her 2016 Olympics will put huge pressure on Brazil's economy to grow and stay competitive.

Reduced transaction costs, currency familiarity, and the ambivalence of the nationality of Bitcoin customers will help Brazilian companies looking to do business outside of Brazil. With the massive influx of tourists and business people to Rio de Janeiro and São Paulo, the acceptance of Bitcoin and other cryptocurrencies eliminates the need to exchange currencies to make secure purchases. Like Argentina, Brazil may be a more command-oriented economy, but global expectations and aspirations should deter them from past trends. Offers more freedom, financial security, business opportunities, transaction security, and privacy. In the case of Venezuela, this could trigger a change in governance, as social media is credited with enabling the Arab Spring. Many of the problems surrounding Venezuela are economic, and the black market is a natural alternative. Preventing asset forfeiture by storing assets in cloud digital wallets is much safer than storing funds in Venezuelan government-regulated banks.

Entrepreneurship is at a lower level than Colombia, Mexico, Chile and Peru, as explained in the previous section. Colombia and Mexico have cities that are expecting global players in the digital space. Lower conversion and transaction fees make it easier to attract business from Europe, Canada and the US. Credit cards and PayPal charge a transaction fee to users who wish to transact internationally, but this fee is reduced.

Latin American Outsourcing to Grow as Call Centers, Development and Design Firms, and Independent Contractors Not Only Can Competitively Bid Like They Used to, But Accept Bitcoin and Other Cryptocurrencies There is a possibility. This is not a passing fad, it's about making transactions easier and cheaper. Fewer barriers to purchase could make sales easier, promote globalization for Latin American companies, and lead to venture capital growth.

Bitcoin will increase international commerce and enable economic growth in Latin America

The benefits of these countries are different, as their need for stability is less urgent, and they have an insatiable appetite for growth. Entrepreneurship, international competition, reduced transaction fees, transaction security, competitive bidding, improved economic development, and changing perceptions are all benefits of cryptocurrency adoption in these countries. A Medellín or Cartagena startup can compete for a service contract with a company in Toronto or another company in Indianapolis. The ability to remove nationality barriers in transactions and focus solely on the services provided and associated costs is a significant benefit.

Consumers gain purchasing power in these countries, as some goods are more expensive in the domestic market than in the foreign market. Foreigners and immigrants can easily, cheaply, quickly and safely send money to their families in their home countries. This will help revitalize the local economy.

Bitcoin and other cryptocurrencies are helping to make the world smaller, much like air travel, the internet, telecommunications and social media have done. Cryptocurrencies are driving globalization, and Bitcoin can help bring this opportunity to Latin America looking to compete and grow in global markets.

Blake Summers said in his commentary on Freevestor's Markets is a contributor of You can also check out more market commentary and participate in Freevestor's free trading games.

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