[kragen]

It wouldn't be surprising if the US government were to take actions against governments that were moving away from the dollar, whether as legal tender, as foreign reserves, or for other purposes like pricing oil, but it doesn't seem likely that the USG knew about this move a month in advance. Are you suggesting that the Salvadorean president is attempting to retaliate for the report by dedollarizing?

[cperciva]

Nothing to do with retaliation. They just want to protect their assets from being seized by the US government.

[kragen]

Hmm, are you suggesting that the US could overthrow their government, either by invasion as in Panama or by funding a terrorist campaign as in Nicaragua, and that Bitcoin would be more secure than suitcases of dollar bills against such actions? Surely not that the US would dramatically devalue its own currency in order to drain El Salvador's reserves? Or are you thinking that dollar-denominated reserves held in overseas banks would be easier for the US to seize, and Bitcoin avoids the need to hold the reserves overseas?

It seems to me more likely that the figures in the article amply explain the move:

> roughly 70% of people do not have bank accounts or credit cards. Remittances, or the money sent home by migrants, account for more than 20% of El Salvador's gross domestic product. Incumbent services can charge 10% or more in fees for those international transfers, which can sometimes take days to arrive and that sometimes require a physical pick-up.

I mean, living in Latin America, I'm well aware that the US has a long history of invading and overthrowing Latin American governments, I'm just not sure how Bitcoin reserves would protect against that.

[TimJRobinson]

It's Sanctions. The USA can put sanctions on anyone as they've done with Russia, Iran, Venezuela. All banks that trade with the USA must comply, and those people/places are locked out of the global financial system.

There's no effort of an invasion or coup involved. It's easy for the USA to do this to pressure people they don't like and that's why so many of these countries are moving away from USD.

[kragen]

Oh, I see. So reserves held in overseas banks might suddenly become inaccessible, even if not actually seized, and Bitcoin (unlike, say, the euro or yen) offers a way to reduce this risk?

[ipaddr]

If the currency is in a bank that deals with the US it could be seized. Bitcoin doesn't allow this.

[acdha]

Kind of: Bitcoin doesn’t allow transactions without knowing the key but that isn’t true for exchanges and the public ledger makes it easy to block transactions using that address. If everyone subject to US jurisdiction or treaty agreements blocks transactions traceable back to tainted addresses, the value plummets.

[lottin]

What? No. The US has no legal power to seize assets outside its jurisdiction.

[CyberDildonics]

You realize that a lot of countries actually don't use dollars and use their own currency right?

[kragen]

The article explains that El Salvador, like Ecuador, is fully dollarized at present. Here in Argentina only the real estate market is dollarized. However, not dollarizing your domestic economy doesn't mean you can hold your central bank's reserves in your own currency; not even the US can do that.

[csomar]

They need access to a USD settlement network for imports/exports.

[DangitBobby]

How does BTC change that?

[csomar]

Very few people are willing to accept El Salvador Sovereign currency. Many people (and maybe countries) will accept BTC.

[indymike]

The national currency in El Salvador is the US Dollar. They retired out their own currency in the 2000s.