Latin America and the Caribbean are quickly becoming popular destinations for crypto developers looking to get their digital currencies accepted as legal cash. According to rumors, the creators of certain popular digital currencies are looking for a suitable location where their cryptos may be legally recognized in debt settlement. In other words, this may be characterized as a legal need to use a digital currency as a regular substitute for fiat cash.
Since their inception in 2009, cryptocurrencies have seen significant increases in value, utility, and popularity; yet, because they are not backed by any other asset, they are highly volatile and subject to regular value drops.
According to sources, five well-known crypto developers are presently in the Caribbean area, attempting to persuade governments to accept their digital currencies as legal cash. The developers are visiting the region in ultra-luxury boats and private jets, hoping to meet with the leaders of the Small Island Developing States (SIDS) in order to gain access to the activity.
Why are they attempting to contact Caribbean leaders?
Even though these Caribbean island countries are small, they provide a safe and secure economic environment. If these countries adopt crypto developers’ ideas, the value of their digital currency will rise. For example, a developer’s crypto currency may be worth $1,000, but if one of the countries declares it to be legal money, the value of the coin would rise by more than tenfold, resulting in massive profits for the creators.
Not only that, but sources claim that these developers are giving large sums of money to governments in exchange for the legal currency status of their cryptocurrencies.
According to the sources, these developers are attempting to persuade government officials that cryptocurrencies are the way of the future and a viable alternative to fiat currencies.
El Salvador’s Demise
El Salvador (El Salvador) In September 2021, a Central American country became the first in the world to recognize bitcoin as legal money, letting customers to use it for all transactions in addition to the US Dollar. As a result of the political and economic failures that followed, the country’s economy is currently in free fall. El Salvador lost $52 million through gambling on digital assets, according to government figures, causing the country to enter a financial catastrophe.
The choice to use cryptocurrencies as legal cash has turned into a nightmare for El Salvador’s economy, putting President Nayib Bukele’s government’s survival in jeopardy as elections loom in 2024. On Wednesday, Bitcoin was down for the ninth session, the worst drop since 2014.
The International Monetary Fund (IMF) recommended El Salvador to support its plan to make Bitcoin legal money in the aftermath of the economic calamities. As it struggles to acquire additional funding through a blocked Bitcoin-linked bond, the country’s dollar debt is also the worst-performing in Latin America.
Other nations, such as El Salvador, are contemplating making cryptocurrency legal money. The IMF has also stated that due to the insecurity and vulnerability of digital currencies, they are unsuitable as legal money.
According to the International Monetary Fund (IMF), the dangers associated with digital currencies exceed the benefits they provide since they pose a threat to consumer protection, financial integrity, and a country’s macro-financial stability. Due to rapid price swings, simple manipulation, and the lack of a physical object to back them up, all digital currencies carry market risks.