Bitcoin goes international as the U.S. debt hits uncharted territory

By SnrMgr at 15 days ago • 0 collector • 15 pageviews

Tuesday, September 7th, marked a historic day for both Bitcoin and El Salvador as the government officially moved to implement Bitcoin as legal tender. While many have been questioning the decision, it looks like Bitcoin could save the country $400 million a year in transaction fees and fund settlements alone, from services like Western Union and MoneyGram.

 

The timing of the Bitcoin rollout coincided with a “flash-crash” in the crypto markets—with Bitcoin dipping as low as 20% on the day of the launch. The world is watching to see how El Salvador will adapt and fully adopt Bitcoin. Still, the experiment chugs along and others are taking note. 

 

While Bitcoin is clearly here to stay, other Central American countries are exploring central bank digital currencies. CBDCs allow governments the advantages of the blockchain without sacrificing control over the currency. 

 

As parts of Central America grapple with crypto adoption, the U.S. faces yet another debt crisis. Janet Yellen has warned lawmakers that the U.S. could experience a national debt default as early as October. She stated, “Once all available measures and cash on hand are fully exhausted, the United States of America would be unable to meet its obligations for the first time in our history.” 

 

The fallout for such an event would certainly ripple across the global financial markets, and lawmakers are scrambling to develop a solution—the most direct course of which is to raise the debt ceiling. Historically, raising the debt ceiling is a partisan vote, typically assisting whichever party’s administration holds office. 

 

While the U.S. is faced with many economic divides, top Fed officials pushed this week for a “quick taper” despite stagnant US job growth. James Bullard, president of the St Louis Fed, called for “the central bank to begin scaling back or tapering its massive $120bn-a-month bond-buying program soon.”

 

The real question is—will we slow down printing money and flooding into the economy anytime soon? We’ll see.

 

Click the button below to read more about the market in this week’s round up.


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