We, the people, tend to more easily accept crypto as a new payment method or even as a banking system because of the transparency it brings. Innovative blockchain technology is here to stay, evolve and change things. But cryptocurrency mass adoption is a bit of a different story, meaning that a whole country's government is to be shifted from its traditional economic system to a blockchain-driven one and accepting a crypto coin as legal tender. And so must happen with many states and countries.
Looking at a government as an entity that is trying to adopt crypto, there are some very simple questions stopping it to do so: Is there any crypto worth betting a country's future on? Bitcoin? Ethereum? Why not one of our own? Assuming that blockchain technology will still be evolving in this rapid phase, for sure, creating a private or public blockchain will be a lot easier in the near future. Maybe through an app with just a few clicks, similar to a website creation app. Maybe it will even be safe and secure. So, why shouldn’t a government use my BTC7.0? Because decentralization removes from authority power in favor of the many. The future of finance may be digital and cashless but it is hard to believe that it will be fully decentralized.
Many countries are discussing and exploring the benefits of deflationary economic systems but only a few are pioneering it. The president of El Salvador, Nayib Bukele, sent a Bitcoin regulating law to the Central American country’s Congress for a vote back in 2021. The law was presenting Bitcoin as an unrestricted legal tender with liberating power and with a noble scope to fight corruption, crime rate, and inflation. So, El Salvador became the first country to ever approve a Bitcoin regulating law with a majority of the legislature’s votes. Since then, considerable progress in terms of educating the population about Bitcoin use was made, but the real fight didn’t even begin. Hard to call it a crypto adoption if the Salvadoran Peso failed and there is still a US dollar empowering the crime rate and corruption. Hard to call it utopic when the president is changing his Twitter bio to “The World's Coolest Dictator” and this whole crypto adoption looks more like a distraction from the real problems. If Bitcoin was supposed to be apolitical, then why is it bringing political tension?
The Central African Republic is the second country in the world that adopted Bitcoin as its official currency. Compared to El Salvador, things might have been done slightly better. The Central African Republic did not renounce to Central African Frank in favor of an intentionally powered currency like USD or EUR and it is moving forward with both BTC and CFA. For the future of BTC adoption, this may serve as a real testing ground, the government being able to perceptively and simultaneously compare both systems, inflationary and deflationary.
Crypto mass adoption is more likely to first happen in countries suffering from huge inflation and with highly corrupt governments where the crypto might affect ordinary people’s lifestyle not for the best but for, at least, slightly better. Can you even imagine European Parliament renouncing to EUR or United States renouncing to USD?
Time will pass and El Salvador and The Central African Republic will eventually become “how-to” guides for other countries looking to do the same. As the adoption is about to firstly happen in less developed countries there is one common issue shared between all of them, the internet connection. A lot of the population is struggling to connect to the internet because of nonexistent infrastructure. They have to do it through satellites, through mobile data. A lot may not even have a phone. I can’t accept crypto as a liberating and legal currency while I don’t have internet access.
There is still a long way to be experienced and it feels like crypto mass adoption is firstly depending on regular evolutionary bases like infrastructure, energy production, and computing power, then we can think of changing the current economic system.
ijeblowrider is a Web3 researcher and author interested in blockchain technology and studying decentralized financial instruments that can facilitate and improve people’s lives for real good. Also in a deep dive for the true definition of art.
This is essay 4 of 4 for the BanklessDAO Writers Cohort