Why Inflation Will See More and More Countries Invest in Traditional Crypto, NOT Central Bank Digital Currencies

Central Bank Digital Currencies (CBDCs) are coming, but so are governments willing to invest in traditional cryptocurrencies before even thinking about developing their own CBDCs. The recent news about El Salvador legalizing the use of Bitcoin across the country is proof of that.

In 1989, El Salvador made a decision to adopt the U.S. dollar because the country’s banking system was broken. The whole goal was to reignite domestic economic activity and stabilize the country. Now, the country is looking to do the same thing with Bitcoin. The overall goal is the same. To gain a first-mover advantage over the rest of the world and reignite the domestic economy.

El Salvador may be one of the first countries to make this decision, but it won’t be the last. Many countries that follow will likely skip creating their own central bank digital currencies in favour of traditional crypto.

In this Netcoins Progressive Investor post, we will explore why that is and how it all relates to inflation.

The Ongoing Battle Against the Coronavirus Pandemic Means Inflation Rages On

Inflation will continue to rage on around the world the longer the coronavirus pandemic continues to keep businesses shut down. But not all countries will suffer equally. 

A recent article published in June suggests that inflation is up 3.6%, which is the highest we’ve seen in a decade. Yet, the same article suggests that in May 2020, the height of the pandemic, inflation rates were some of the lowest we’ve ever seen. The fact that Canadians are seeing a 3.6% jump in inflation was actually inflation catching up to where it should be.

Yet in the United States, things are a little bit worse. American consumers are dealing with a 5% increase in prices for everyday consumer goods over the past year.

This all speaks to a fundamental problem. The average person doesn’t understand inflation and the average government isn’t doing a good job managing money printing nor the coronavirus.

Many governments are dealing with their highest levels of inflation in more than a decade, yet the American federal government doesn’t seem too worried.

Perhaps mixed reviews and opinions from various stakeholders in governments in both Canada, the United States, and around the world are exactly why a country like El Salvador is choosing not to blend cryptocurrencies with the traditional financial system and instead, legalizing Bitcoin.

Governments Don’t Always Know What They’re Doing

If seemingly endless money printing and the coronavirus pandemic are proving anything, it’s that most governments around the world are failing in how they handle the coronavirus pandemic, fiscal policy surrounding money printing and inflation.

Everybody knows printing money will increase the prices of consumer goods and the cost of living, but most governments won’t admit to not knowing how to manage the conundrum.

2008 represented a perfect time to introduce the Bitcoin whitepaper to the world. The Global Economic Crisis inspired people to look for a different option. Perhaps endless money printing and a pandemic whose aftereffects may never fully go away will inspire the same sort of innovation.

But whether that happens or not, the underlying message governments are sending out in trying to deal with the unknowns of both the virus and inflation are showing people not to take decisions that affect us socially and politically for granted.

At the end of the day, governments are only as equipped as the average everyday citizen that gets voted into Parliament, and none of us really knows what the short-term future holds for Canada or the rest of the world.

The bottom line is, governments don’t always know what they’re doing.

Thanks to cryptocurrencies built on public blockchains, both governments and the people that vote for or control them have another option. If they’re smart enough to weigh the risk and reward of choosing Bitcoin and other traditional cryptocurrencies over anything government-backed, there’s a good chance we really are on the verge of a financial revolution.

Sign Up For a Free Account with Netcoins & Learn To Invest In Traditional Cryptocurrencies Through Personal Experience

Deciding whether or not to trust your government, whether that relates to a vaccine, monetary policy, or any other issue you care about is a deeply personal one.

You may or may not choose to use Bitcoin, Ethereum, Litecoin, or QCAD over CBDCs in the future. Either way, learning how to send and receive Bitcoin and other cryptocurrencies will give you an appreciation for what using a truly democratic form of payment is really like.

You can register for a free account with Netcoins to get started. It’s based out of Vancouver and is one of the most trusted cryptocurrency exchanges in Canada.

Personal experience won’t just give you insight into how to use Bitcoin. It might even spark you to dive deeper down the rabbit hole and ask yourself important questions about how governments are going to handle issues surrounding your health and your money in the future. And it might just even motivate you to become your own bank.

Get started in the crypto market, set up an account at Netcoins. Create an account, fund it with an e-Transfer (other funding options available), and head to the trade page to buy or sell bitcoin. Netcoins is a fully regulated, publicly owned crypto trading platform.

After all, that’s the reason Bitcoin was invented in the first place.