5 countries that should be adopting Bitcoin right now

Bitcoin is a new way to think about money, and there are people in places all around the world who could use it for purposes other than speculation. Maybe they don’t have faith in the financial system of the country they live in. Or maybe national regulations put limits on what kind of assets they can invest in. Bitcoin could assist with these and other economic problems in some countries in particular.

For a country’s currency to be successful, its citizens must believe in the good faith and credit of its government. Whether it is dollars, pounds or euros, money has value in part because of the government that backs it, along with some other factors.

So let’s take a look at five countries where citizens might have more than the usual reasons to adopt Bitcoin … whether that’s as a means of payment, as an investment or simply as a store of value.

Chinese people have a reason to be interested in Bitcoin since – other than pricey real estate and slow-growing bank accounts – they don’t have many other places to store their money. While China has national stock markets, Bitcoin is an attractive option because of its global reach. There is already a China-specific exchange called BTCChina.

Throw in the fact that the flow of US dollars in Iran is relegated to the black market, and Bitcoin seems like a golden opportunity in the Islamic Republic. And the country’s inflation rate – as the chart above shows – is getting worse, especially in the last few years. Strange as it may seem, bitcoins might just be less volatile than that of Iranian rials. That might convince those who want to their money to remain valuable to use something else … possibly Bitcoin.

While the youth of Greece cannot find a job, the elite are trying to get their money out of the country. Riots have been a reality in Greece as a result of diminished government services and the terrible labor market, so investment in Greece is flowing out rather than coming in. Most likely, some of it is probably going into Bitcoin.

“Argentina has a terrible legacy of currency crises, and it is going through one right now”, says Fergus Hodgson, an economist and policy advisor with the Future of Freedom Foundation. “Bitcoin offers a vehicle for convenient civil disobedience. That is acting in a peaceful manner to engage in relatively freer trade and transfer wealth across nationalities with ease.”  In fact, Tradehill, a Bitcoin exchange, is planning to open an office in Argentina.

The resulting problem is that there is a lack of liquidity in the banking market of Italy. It’s like paying only the interest on nearly maxed-out credits cards: you can’t get out of the debt holding you down. Italians could increasingly look at Bitcoins to hedge against this uncertainty. It’s possible that Italy’s debt will hit 130 percent of GDP this year, leading to fears that debt could balloon out of control.

These five countries have unique and intertwining problems with their money. But cryptocurrencies like Bitcoin could influence nations to adopt different economic or monetary policies. The actions government leaders in these countries take will be interesting to watch. They cannot stop Bitcoin itself, so they will take actions in ways that will reveal what they really think about it.

Some of these countries can do things to control the flow of information to the masses. Since Bitcoin is a purely electronic currency, countries with control over their telecommunication industries could take steps to block access to web-based Bitcoin exchanges and wallets. That might slow down adoption, but is unlikely to stop it completely due to the digital currency’s decentralized nature.

What countries do you see Bitcoin being an influence in? Can countries do anything to stop Bitcoin?

Sources:

[1]. Market Oracle

[2]. Trading Economics

[3]. Greek Suicides up 27% - Quartz

[4]. Scott Grannis

[5]. Google: Eurostat, World Bank