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.
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.
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?
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.
So far no such attack on Bitcoin's fungibility has materialized; it's plausible that the outcome would be that Bitcoin would become useless to everyone subject to US jurisdiction or treaty agreements. So it seems unlikely to happen without a major war, because that plausible outcome would result in enormous capital losses for many people who are influential in the US. Another plausible result is countries withdrawing from treaty agreements with the US, even if they don't care that much about Bitcoin as such.
Even if there was some blacklist that all exchanges abided by, you can still use something like Ren Project to put your Bitcoin on Ethereum as renBTC, exchange it to USDC (or any other cryptocurrency) using a decentralized exchange, and withdraw it.
This process is completely decentralized, and AFAIK you can't trace the move from BTC to renBTC.
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.