Who doesn’t like a good ole video that dives into the possibility of another nation state
getting involved with Bitcoin.
Bitcoin is a global asset that could set nation states free from the grasps of the financial
systems of old.
So let’ get out with the old, and in with the new…because it’s time for Chico Crypto!
We all know about El Salvador.
They are the first sovereign nation state to adopt Bitcoin in a legal way and on a large
scale.
In September they passed the laws which would make Bitcoin a legal tender in the country,
a global first.
But that isn’t all, El Salvador this year is ramping up legislation to cover the issuing
of Bitcoin Bonds which could see an initial release as early as a couple weeks to a month.
Rumors are abound the initial launch could be as soon as February.
Now how do these Bitcoin bonds function?
Well kind of like normal bonds.
El Salvador will issue debt and investors buy it up in exchange for an annual coupon,
which is a set percentage of what they invest.
The difference is what El Salvador plans to do with the proceeds.
Half of the proceeds go toward buying Bitcoin on the open market, while the other half will
support the country's efforts to build a "Bitcoin City" at the base of Conchagua, an oceanside
volcano.
The plan for this is to allow El Salvador to sidestep and bypass the Wall Street banks
and international institutions that have had a century-long choke hold on loans to developing
economies.
Which is getting in hot water with the traditional financial system…
As we can see in July of last year, Moodys Lowered El Salvador’s Credit Rating.
This included long-term, foreign-currency issuer and senior unsecured ratings to Caa1
from B3, which according to Moody’s rating system, the country has a very high risk of
default on its loans.
From the Conidesk article we can see Moody’s said the reason for the downgrade.
“Noting a “deterioration in the quality of policymaking,” the agency said that the
bitcoin law and other measures reflected “weakened governance in El Salvador, raising tensions
with international partners – including the United States – and jeopardizing progress
toward an agreement with the IMF (International Monetary Fund)...
THE IMF, the BIG international financial institution who finances the members by working with developing
countries to “help”them achieve macroeconomic stability and “reduce” poverty.
The IMF El Salvador has been a member of since 1946.
The same IMF who just last week released statements urging El Salvador to drop Bitcoin as legal
tender.
(Link #4 IMF Legal Tender)
Well in response to all of this, Nayib Bukele, the President of El Salvador tweeted.
BREAKING…El Salvador DGAF…el salvador doesn’t give a funk!!
So El Salvador isn’t bowing down to the powers that be….but who could be the next
country to follow in their Steps!?
Who could be the next to go all in on Bitcoin??
What about the #3 Most Powerful country in this world?
I’m talking about Russia
Soo to begin on why this could be the case, some suspicious things have happened throughout
the past couple of weeks.
January 20th, it was announced across the news airwaves that Russia was proposing a
ban on the use and mining of cryptocurrencies.
From the rooters article we can see, specifically, it was Russia’s central bank who was proposing
the ban and this included “preventing financial institutions from carrying out any operations
with cryptocurrencies and “developing mechanisms to block transactions aimed at buying or selling
cryptocurrencies for fiat currencies.”
Gosh dang brutal.
Basically a shot through the crypto heart especially with the mining ban included as
Russia is the 3rd largest country in terms of Hashpower.
Which was reflected in the Bitcoin price…remember January 20th was the day the news was released
and Bitcoin was over 43 thousand dollars, by the 24th the price fell by 10 grand, to
just above 33k.
A crash of over 23 percent.
Russia’s ban was a major factor of a crashing Bitcoin price…..the last time Bitcoin had
an over 10k crash like this due to geopolitical news, was back in September when China did
the same exact thing…supposedly banning transactions and mining…and DANNNNG like
Joe dirt…don’t the charts of the bitcoin price during the “bans” look eerily similar
???
Well the China Ban wasn’t what it seemed.
This CNBC article sheds some light on what I mean, where experts estimate 20 percent
of the hashpower still comes from China.
The article states.
“Data from Chinese cybersecurity company Qihoo 360 shows that underground crypto mining
appears to be alive and well in China.
In a November report, the research group estimated that there are an average of 109,000 active
crypto mining IP addresses in China on a daily basis.
Crypto mining has survived in China, in part, because a lot of miners weren’t sure whether
Beijing was actually serious about the ban.
China was still mining away, and transactions were still flowing.
Of course Russia’s ban wasn’t what it seemed either.
The week after the initial call for bans from the Russia Central Bank, Russia’s Finance
Ministry opposed a ban, and believed regulation of cryptocurrency was the way forward.
This came from the Ministry’s head of Financial Policy, Ivan Chebeskov.
Specifically Ivan said “"We need to regulate, not ban,"Regulation is sufficient to protect
our citizens."
The Ministry of Finance has prepared a set of proposals and is waiting for the government
to evaluate it” Banning crypto transactions and mining would mean undermining the industry's
technological development.
"We need to let these technologies develop."
Russia’s central bank and Ministry of Finance don’t see eye to eye apparently.
Central bank want’s ban, the ministry wants to develop the technologies.
Who has the final say??
Well Mr. Putin does.
Bloomberg reported January 27th in an article titled “Putin Backs Crypto Mining Despite
Bank of Russia’s Hard Line” and the article states “President Vladimir Putin backs a
Russian government proposal to tax and regulate mining of cryptocurrencies, rejecting the
central bank’s proposal to ban it completely, according to three people familiar with the
matter.
Russia did a flip flop…they brought the FEAR and FUD, crashing BTC…to only say,
nah we like Bitcoin and crypto, we want to regulate.
Was someone looking to stack SATs on the cheap??
Pick up Bitcoin for that near 30k bottom??
Hmmm I wonder why??
Well everyone should know the rising tensions of Russia and Ukraine.
There are a supposed 100,000 Russian troops on the border of Ukraine and there are Fears
that there could be a Russian invasion coming soon.
Well guess what?
Yesterday, the Senate was drawing up sanctions through a bill, should this happen.
From the article we can see it says “The legislation under negotiation among members
of the Senate Foreign Relations Committee and others would target major Russian banks,
hit Russians’ savings and pensions and limit the market for Russia’s sovereign debt,
among other elements”
Sooo, Senator Bob Menedez is the one who drafted this Bill.
Let’s hear what it’s called and what sanctions are included from the man himself.
Sanctions
target the trade of assets owned by Russian politicians and the trade of natural resources,
which makes up most of Russia's GDP.
But the BIG one, cutting Russian banks out of the SWIFT network for international trades.
Now trades of natural resources and the SWIFT network majority use the US dollar for settlement….
Is it possible they are looking at Bitcoin and crypto as an alternative??
Is this the reason for the FUD to crash it, and then their reversal last week?
Well back in 2019, when Russia was once again facing sanctions…this article came out “Russia
plans to tackle US sanctions with Bitcoin investment, says Kremlin economist.
The article states “Russia is preparing an investment in Bitcoin to replace the US
dollar as a reserve currency in a bid to tackle US sanctions, according to a Russian economist
with close ties to the Kremlin.
Vladislav Ginko, an economist at the Russian Presidential Academy of National Economy and
Public Administration, a state-funded institution, said the government is taking steps to minimize
the impact of US sanctions that have hit the Russian rouble by replacing some of its US
dollar reserves with the world’s most popular cryptocurrency….
Hmmm is all Chico has to say…Cheers I’ll see you next time!!