Notable Bitcoin Market-Oriented Economies in Latin America

Much has been written about Bitcoin and how the authorities and businesses in China have responded to it. But there may be more interesting possibilities for this currency and other cryptocurrency. The Wall Street Journal published a piece last week about the apparent divide in Latin America.

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The Pacific-facing countries are more command-oriented than the Atlantic countries. However, the Pacific countries (with the exception of Ecuador or Nicaragua) have more market-oriented economies.

Latin America is now a continent that is being viewed on a global level. It has seen a slowdown in European growth, and an Asia-Pacific region has been accepted into the global economic conversation. Latin America will be affected by alternative currencies, and each side will feel the effects in a different way. Bitcoin will be a part of Latin American Growth, as both currencies are prominent in the spotlight. and other cryptocurrencies (including Bitcoin), will allow Latin American entrepreneurs and businesses to compete with the rest.

These countries have economies that are more dependent on national interests. Cuba is the most extreme example of a state-run economy. It has a Communist regime, but has made some concessions to economic liberalization. Venezuela is the most extreme state-run economy, and it is currently in a political and socioeconomic crisis. Argentina has seen its fair share in instability and command-oriented events, including price controls, drama regarding possession of the Falkland islands, inflation of 26% and strikes by police officers, to name a few. Brazil is often feared for its old ways, and there is currently a lot of red tape and taxation that is higher than other countries.

Notable Market-Oriented Economy in Latin America

Mexico’s efforts in attracting and growing business are not limited to Mexico City. Guadalajara was highlighted as a digital and tech growth destination, much in the same way that Bogota, Colombia, is an established economic powerhouse, and Medellin is a young, digital force. Mexico currently ranks 14th in terms of economy, and is growing. The drug cartels still control Mexico’s northern border, and there is still a lot of demand for drugs. Ciudad Juarez is still plagued by cartel-induced violence. The Sun Bowl strongly discouraged Mexican visitors from crossing the border.

FARC is still being fought in Colombia, but the country is clearly winning after President Uribe’s term. FARC’s presence in Colombia has been limited to the jungle regions. To a certain extent, active peace talks are being held with FARC. Colombia’s economy still has a lot of room for growth in agriculture, finance, agriculture, tourism and digital technology.

The country is actively pursuing Americans for real estate purchases by promoting its pristine beaches and tax policies as well as their English fluency. Belize still has much to grow and must shake off its stigmas.

The Heritage Foundation considers Chile to be the #1 country in Latin America in terms of economic freedom. Chile has a surplus in trade and a central bank rate of 4.5% which would make it attractive for investors from other countries. If you are looking to trade the Chilean Peso, it may be worth the effort. This is because the Chilean Peso can be traded against countries/economic areas that have very low interest rates, such as the United States and the European Union. Chile is low in inflation and has policies that not only benefit copper exports but also other exports to maintain surplus. Morgan Stanley projects that Chile, Peru and Colombia will grow an average of 4.25% in 2014.

These countries do not have to deal with looting, fights over toilet papers, or leaders who want to escalate actions against other countries.

Bitcoin’s Impact on State-Oriented Economy

Currency controls are a part of all state-oriented economies. Price controls are an infamous feature of Argentina and Venezuela. Brazil’s influence on the economy is due to their excess influence, possible corruption issues and inflationary concerns. Investors, entrepreneurs, and the common man will all look to the market to fulfill their needs. These state-oriented economies are associated with rationing, red tape and high costs as well as possible surveillance. Many people will be able to access the internet and use Bitcoin and other cryptocurrencies.

Although it can be difficult to compete globally in countries that are more isolated, the use of the internet and the ability for transactions to be made in an untraceable manner on a global market will allow citizens to obtain the goods and services they need at a competitive price. Venezuelans will now be able buy toilet paper from abroad without needing to use any currency that has been grossly debased. Venezuelans will be able to start their own businesses while they are still in Venezuela. This could help them to finance their ventures or even deport to Colombia. More than 26% of Venezuelans access the internet every day. Venezuela has not yet filtered the internet and buying Bitcoin is much safer than keeping Bolivar.

Bitcoin usage could endanger the government’s grip on the economy by making it ineffective by adopting the private cryptocurrency. There are less tax revenues to collect, a population that is financially and literally armed (you could have purchased anything on Silk Road), as well as decreased influence by political leaders and enforcers. This idea can be applied to Venezuela-lite Argentina, an economy that has a lot of potential.

Brazil’s economy could expand further by allowing businesses to be exposed overseas and getting rid of the exotic sovereign currency issue. Brazil’s World Cup 2014 and 2016 Olympics will place great pressure on its economy to expand and maintain its appearances. Brazilian companies looking to do business abroad will benefit from lower transaction costs, currency knowledge, and nationality ambivalence when dealing with Bitcoin customers. The acceptance of Bitcoin and other cryptocurrency will make it easier to transact securely and remove barriers to currency conversions. Brazil might be more command-oriented than Argentina, but they should strive to surpass past tendencies.

Bitcoin and its rivals offer more freedom, monetary security and entrepreneurship opportunities. They also provide greater privacy and transaction security. It could be used to bring about a change in Venezuela’s governance, much in the same way that social media brought the Arab Spring to life. The black market is an alternative to the economic problems in Venezuela. The cloud-based digital wallet is much safer than keeping assets in a bank that is regulated by Venezuela.

The role of Bitcoin in economic growth for the Pacific Countries

The previous section describes entrepreneurship at a lower level than in Colombia, Mexico and Chile. Colombia and Mexico are cities with ambitions to become global players in digital space. Lower transaction and exchange fees would make it easier to attract business from the United States, Canada, Europe and other countries. International transactions will be easier for users of credit cards and PayPal if they have to pay transaction fees. This fee could be lower.

Latin American outsourcing could experience growth because call centers, design and development firms, as well as independent contractors, are able not only to compete as they do now but also to accept Bitcoin and other cryptocurrency. This will help drive more business. This isn’t a trend, it’s a way to make transactions easier and more affordable. It will reduce the barriers for purchase and help Latin American companies be globally competitive, which could lead to Venture Capital growth.

Bitcoin will facilitate economic growth and international business transactions in Latin America. These countries will reap the benefits of Bitcoin because stability is not an urgent need. Instead, these countries are hungry for growth. These countries have many benefits, including the ability to compete globally, reduce transaction fees, better economic development, transactional security and competitive bidding. For a service contract, a startup in Medellin and Cartagena can compete against a firm in Toronto or another in Indianapolis. It is a great benefit to remove any nationality barriers from the transaction and focus on the service provided and the costs involved.

These countries are also a win for consumers as they will have more purchasing power since some products are more expensive in their own country than in foreign markets. Immigrants and ex-pats can send money to their family in their home country quickly, cheaply, securely, and in a secure manner. This can boost local economies.

Bitcoin and other cryptocurrency help to make the world smaller, just as air travel, the internet and telecommunications have done. Bitcoin and other cryptocurrencies encourage globalization. This will be a boon for Latin America which is eager to grow and compete in the global market.

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