Bitcoin Forum

Any thoughts about Bitcoin replacing one of the extremely volatile currencies of a small country?

Probably they are too computer illiterate to operate in BTC as of now and lack the resources.

Why think small?  ;)

Bitcoin is not really a currency. It's even more volatile that most FIAT currencies.

Bitcoin is volatile so i don't think it can replace any currency no matter how small the country.

All you need is a smart phone and an Internet connection.


It is a currency and it's only volatile when you peg it to other currencies. 1 bitcoin is always worth 1 bitcoin.

I'd think 2 things would need to be fixed first

1) bitcoin price volitility
2) somebody or some company to open the doors to make it simple technology wise.  I'm talking easy/cheap payment methods like Square brought Visa/Mastercard to small businesses and some reliable/safe non-technical wallet service.  Relying on phones has its challenges in a 3rd world, dont consider just phones but also data-enabled phones and plans which usually bring up costs.

well giving them something that goes up and down by someone selling 10k bitcoins isn't exactly good. selling 10k bitcoins should not make the price drop by almost 300 bucks, that is bad. bitcoin needs to be used more by consumers to drive demand up for it so the price will stabilize because there is more daily volume.


when that happens it would be ok.

We are 5 to 7 years away from a country pegging part of its forex reserves in btc
Though I hope it happens much sooner

I can't think of any benefit to that government (not the people in that country), and so I don't see why a government will adopt bitcoin (which they have zero control) as its official currency.

Even if we consider theoretically the possibility for this to happen, this could happen at least 20 years from now. 2 new generations of IT literate people in all business fields, including economy. Try to explain what bitcoin is to a grumpy old lady who has worked as an accountant most of her life and she is counting the minutes till the moment she retires. ;)

I read sometimes ago that whole population Dominican Republic are getting some bitcoins.There are about 75k people there and bits are gonna drop soon there to every person's wallet.You may google it for more info.I don't have a reference link as of now to provide you

No it can't be replaced to a countries currency,volatility within own countries currency is a very dangerous thing that a country could withstand

They could actually use it in order to back their regular currencies! Using Bitcoin for day to day things, especially in physical stores or markets is still too cumbersome and requires too much technology! But as a backing it could tremendously help countries, although it's a big gamble on the success of Bitcoin!

I agree, why not think about a continent or maybe a large portion of one.  I think with something like Bitcoin Bigger and more is better.  Depending on one small economy is risky if you ask me.  Diverse and wide distribution is the a better approach.

No.

Fiat currencies are backed by central banks, or by some governmental stuff. No country on earth will use something that no one can control as currency.

But it is not impossible see some crypto based currency backed by government being used as national currency. Will be interesting to see how they will make paper bitcoin for transactions outside the interent

I guess we have to wait till the volatility of bitcoin subsides. Then, who knows, it might automatically replace the currency of a small nation.

Well you still may use it in order to back your government-issued currency! That's what countries have done with gold for ages! Gold also isn't exactly controlled by anyone, merely by its scarcity! The price of gold is also fluctuating heavily (not as much as Bitcoin maybe, but still). Using Bitcoin as a backing would definitely be interesting!

From the viewpoint of central banks, the problem with "Gold Standard" is that they don't have the freedom to print more money or bail out, and so no country is using it anymore now. For the same reason, I don't think they will use a "bitcoin standard" to back the fiat money with bitcoin.

But a small country struggling with a high inflation may want to opt to do that, wouldn't it? I'm no expert in economics, but I'm willing to believe that there may be cases where this could be beneficial for a country to do!

maybe a small amusement park first , then a town, then a country

How would it be possible to restrict it only for one country ?

What fiat currency is more volatile than BTC? None that I can think of. Sure, during historic times of hyperinflation, etc. But just look at the history of BTC. We can't even discuss it as a currency until it stops being so volatile.

Bitcoin has the greatest chances of replacing the currencies (or potentially supplementing) of third world countries that have a very small economy and very small stand of living.

I don't think any country , even if it is small and poor would consider changing their currency with bitcoin.

No, it is also volatile when measured as the cost to buy things, for almost all merchants.

And 1 dollar is always worth 1 dollar.
Doesn't really get us very far, does it?

Yes, it's not just when pegging it "to other currencies" but to purchasing power. That's what is important here. In that light, the dollar is relatively stable. Bitcoin is extremely volatile.

Why not thinking it as a global currency?
It can be used as bridges for different currency in the world

http://www.coindesk.com/70000-caribbean-island-residents-receive-bitcoin-2015/
These might interest you.But it's hard to make or just impossible to replace a currency.Look at the volatile nature of this beast

I think the way bitcoin is at the moment any Country is going to be a little dubious about making it a currency for their Country. Don't get me wrong having bitcoin as a currency in a small Country could be a huge step but it's also risky.