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Author Topic: Would adoption of bitcoin as official currency by a small country validate it?  (Read 1625 times)
canadaduane
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May 18, 2011, 02:54:26 AM
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I'm curious.  Suppose a small country began using bitcoin as its official currency.  It seems that if such a thing occurred, then it would become a foreign currency, to be exchanged like any other foreign currency.  Would fears of a "US government crackdown" then go away?
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rezin777
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May 18, 2011, 02:55:24 AM
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I'm curious.  Suppose a small country began using bitcoin as its official currency.  It seems that if such a thing occurred, then it would become a foreign currency, to be exchanged like any other foreign currency.  Would fears of a "US government crackdown" then go away?

The U.S. Gov has never involved itself in other countries affairs right?
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May 18, 2011, 02:57:43 AM
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No, because the US government has the legal power under established precedent to ban the use of any foreign currency they choose.

Also, I don't see why any foreign country would legitimize bitcoin. With the debatable exception of Ron Paul, people become politicians so they can enjoy political monopolies. Bitcoin is destructive to that end.

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canadaduane
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May 18, 2011, 02:59:13 AM
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The U.S. Gov has never involved itself in other countries affairs right?

Valid point. However, wouldn't it make it easier for large companies--such as trading and exchange companies--to make a legitimate business of it?
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May 18, 2011, 03:01:11 AM
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Depends on what and how much that country exports.

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canadaduane
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May 18, 2011, 03:02:18 AM
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Also, I don't see why any foreign country would legitimize bitcoin. With the debatable exception of Ron Paul, people become politicians so they can enjoy political monopolies. Bitcoin is destructive to that end.

Some countries have pegged their currency to the dollar. Others see the dollar as a threat. Certainly it is in the best interest of a minority to control the money supply, but if trust levels are low then locally produced currency could be intractable. In such a case, I could see a glimmer of motivation for a small country adopting the value that bitcoin provides--especially given bitcoin's capacity to provide its bearers with access to global electronic goods.
ArsenShnurkov
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May 18, 2011, 03:03:59 AM
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I'm curious.  Suppose a small country began using bitcoin as its official currency.  It seems that if such a thing occurred, then it would become a foreign currency, to be exchanged like any other foreign currency.  Would fears of a "US government crackdown" then go away?

Yes. If, for example,
http://en.wikipedia.org/wiki/Nauru
will use bitcoin as a currency, then I will be able to use current legislation in my country.

Until then bitcoin will lead me to a prison for 8 years.

Quote
During the 1990s, it was possible to establish a licensed bank in Nauru for only $25,000 with no other requirements. Under pressure from FATF, Nauru introduced anti-avoidance legislation in 2003, after which foreign hot money left the country. In October 2005, after satisfactory results from the legislation and its enforcement, FATF lifted the non-cooperative designation.

So, FATF is the greatest enemy of bitcoin.
JohnDoe
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May 18, 2011, 03:22:04 AM
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Valid point. However, wouldn't it make it easier for large companies--such as trading and exchange companies--to make a legitimate business of it?

Sure, but then the US and maybe other big countries would threaten with an embargo to stop/slow down the building of bitcoin infrastructure in that country.
jo.bo.co
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May 18, 2011, 03:30:01 AM
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I could see how this would work, as the US gov't would not have a reason to hate bitcoin, if it saw it as principally the currency of foreign economy.

But the country couldn't be something like Sealand- it would have to be a country with a real economy, and frankly, IMO it would be very hard to find a small country that even has the technological resources to build up a bitcoin economy.

jo.bo.co design services (http://bitcointalk.org/index.php?topic=6416.msg93676#msg93676)
marcus_of_augustus
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May 18, 2011, 05:00:23 AM
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Principalities of Liechtenstein or Monaco ... ?

or the enclave of Campione d'Italia .... small technologically advanced countries that may be sympathetic to economic liberty provided by bitcoin adoption exist.

MacFall
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May 18, 2011, 01:54:25 PM
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Also, I don't see why any foreign country would legitimize bitcoin. With the debatable exception of Ron Paul, people become politicians so they can enjoy political monopolies. Bitcoin is destructive to that end.

Some countries have pegged their currency to the dollar. Others see the dollar as a threat.

That is because some countries are powerful enough to assert their own political monetary monopolies, while others lack such power, and their political classes are content to be parties to the benefits of the US monopoly. There is no political advantage to a nation adopting bitcoin. That is its best quality. I can see it being possible for a conservative monarch of some kind to use it in a misguided attempt to be a "laissez-faire ruler", but only theoretically.

What could be more likely is that a smaller polity might adopt it in the process of secession from a larger state (say, the Canton of Zug from Switzerland, for example) but even that likelihood seems marginal to me. And the US, as history shows, is rarely very friendly to secessionists. We can be nearly certain that if a US State were to secede with pro-liberty motives and use bitcoin, that would only solidify the Federal government's position against it.

No king but Christ; no law but Liberty!

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May 18, 2011, 02:28:34 PM
 #12

The first small independent jurisdiction to adopt Bitcoin will be Kahnawake Mohawk Territory.

They have a long-established legal relationship with Canada as a sovereign nation (i.e., it would be war if Canada decided they weren't allowed to use bitcoin - Mohawks have a history of organized armed resistance against Canadian forces), they have an ass-load of computers, and they have a thriving poker business to let the bitcoin flow in and out.

You heard it here first folks. Kahnawake for bitcoin's premiere and most logical government-level adoption.
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