Bitcoin: 1 Country Down, 194 to Go

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Did you know (I sure didn’t) that there are 195 countries in the world?

Did you know (I did) that only one so far has made Bitcoin legal tender? That country is El Salvador, down in Central America. And sure, as dominoes fall, there will be many more following El Salvador’s lead.

So, 1 down…….194 to go.

Already Panama has unveiled a bill to make Bitcoin legal tender. That proposal came only one day after El Salvador officially adopted the cryptocurrency. As the “dominoes” begin falling, many countries are introducing legislation to expand possible applications for cryptocurrencies. As exaample, a new Panamanian bill describes an outline of government use of blockchain technology for purposes of identity and transparency. Using technology in this way — and at a national scale — would certainly be an unprecedented move with a dizzying array of implications. 

So if legislation in Panama does get enacted (it looks promising), that would make it 2 down and 193 to go. But hold on. Cuba, Brazil and Argentina are also well on their way to enacting similar legislation. Moving over to Europe, Ukraine has become the latest country to legalize bitcoin as the cryptocurrency slowly goes global. Although officially not making Bitcoin legal tender, Ukraine has opened up that possibility.

It’s no wonder that governments around the globe, along with their central banks, are 1) nervous, 2) concerned, 3) scared, and 4) angry. What if populations may not need a fiat currency? What if Bitcoin becomes THE global currency? What if central bank governments lose control of their monetary policies? Why didn’t “we” see this coming (it’s not our fault)? And, what if there are no more great foreign trips and fancy dinners to discuss monetary goals? OMG!!

Now, before you say it can’t happen, realize it can. A former partner and longtime friend of mine recently pointed out that, even if all this happens, Bitcoin would still have to be converted into a fiat. Ah, but I pointed out to him, maybe not. What if there is a totally decentralized exchange for Bitcoin that is not domiciled in any jurisdiction? Free of regulation. A Starbucks latte in Bangkok or Kiev or Fargo, North Dakota is priced in Bitcoin. Well, it’s already under way.

The CEO of Twitter (Jack Dorsey) revealed his plans to create a decentralized Bitcoin exchange through his mysterious startup tagged “TBD.” Since Mr. Dorsey also owns Square (a global payments firm) you should take notice. By creating “TBD,” and without making its function totally clear, he mentioned that it is “an open development platform with the sole objective of facilitating the creation of decentralized financial services, without custody and without permission,” focusing on Bitcoin.

So far, there is no popular exchange for Bitcoin that is decentralized or that has managed to implement payments on a massive scale with Bitcoin and other digital currencies. It’s coming and that sends chills to global central bankers everywhere.

Just think. It may have all started with El Salvador (big things come in small packages). That’s 1 down and 194 to go. So, which country will be the 195th domino to fall? Christmas Island (Southeast Asia) or the United States?

Whew, that’s a tough one to call.