In turbulent Latin American economies, will cryptocurrency offer advantages for investors?
Hyperinflation is like kryptonite to the stability of an economy. Prices rise like crazy. Your currency devalues into nothingness. And then what are you supposed to do? According to some, the answer is cryptocurrency.
When hyperinflation ravages the economies of troubled South American countries like Argentina, Brazil, Bolivia, Peru, and Venezuela, savvy middle-class and wealthy investors eye bitcoins and other growing examples of cryptocurrency as a viable alternative to their own volatile currencies.
Roberto Ponce Romay who runs the Miami-based Crypto Assets fund, told Bloomberg, “We’re convinced this will become a new asset class, just like stocks and bonds.” So far, he added, he has worked with investors across the Americas, most notably from Argentina, Colombia, and several Central American nations.
In Venezuela, people have used cryptocurrency to wire money to far-flung relatives and for down payments on condos.
Just this spring, Venezuelan dictator Nicolas Maduro rolled out the petro, the world’s first sovereign digital currency. But the petro is already reviled by world economic leaders. President Trump signed an executive order on March 27, banning the petro for U.S. citizens. And if that wasn’t bad enough, The Guardian questioned whether the petro is, in fact, a “shitcoin.” Only time will tell.
Words by Serena Kim
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