Rio De Janerio Adopts A Bitcoin Standard
El Salvador was the first domino to fall and it looks like their improvement in GDP and interest in the country has encouraged other Latin American countries to consider a bitcoin standard. We've heard rumors of Paraguay adding some bitcoin-friendly regulations in the past, but that news has gone quiet.
Then recently we heard Strike, the company that helped El Salvador move towards a bitcoin standard launched in Argentina a country that has been ravaged by currency debasement and sovereign defaults.
Now it looks as if Brazil could be getting in on the action with the city of Rio De Janeiro adopting a bit of a bitcoin standard.
Tax rebate
To get the ball rolling and build up a bitcoin position, the city will encourage citizens to pay their local taxes in bitcoin and offer a 10% discount to anyone who settles their tax obligations in bitcoin.
This encourages people in the city of 6.7 million people, roughly the same amount as the whole of El Salvador, to hold bitcoin. No one likes to pay taxes and anyone who wants to reduce their tax bill would now be keen on holding a position in bitcoin, even if they did not want to be a bitcoin.
This increases demand for bitcoin in Rio. As citizens pay their taxes, it also helps build a treasury for the Rio local government to leverage in the future.
I would have expected such a move from some American cities in Floria and Texas that have been pretty outspoken about bitcoin, but it seems Latin America is taking the lead on adopting a bitcoin standard.
Taking a position in bitcoin
According to several reports, which I have referenced below, there has been an announcement from Eduardo Paes, the mayor of Brazilian city Rio de Janeiro, that the city will embrace Bitcoin. The city of Rio will intend to invest 1% of the city's treasury reserves in bitcoin as a strategic reserve asset. Similar to the way El Salvador has built up a national reserve of bitcoin.
El Salvador currently holds around 1,390 bitcoins, which they picked up for a steal if we look at the fact that it is worth over $58 million at current prices and I am sure that will continue to pay dividends into the future.
Brazil has a history of country changes
Brazil has changed its currency twice in its history so the people of the country are no strangers to the concept. Their local fiat currency the Brazilian real has not done all that well when compared to other Brics and G7 nations so it makes sense for them to look into diversifying into an option like bitcoin.
It's going to be interesting to see if this roll out is a success on the city level and if this could force other cities to compete as more citizens flock to Rio to reap the benefits of the reduced taxes.
Bitcoins biggest grifter reports
While I am no fan of Pomp, he does break news early as he continues to build his YouTube grifting business. He speaks bitcoin but he shills all kinds of shitcoin and bullshit projects, so take what he says with a pinch of salt, you can find his report below.
Sources:
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I hope my country also do so but they are not doing anything but we hear news of ban now and then but I don't think its gonna stop me from trading cause I can use decentralized exchanges
I hold no hope for my country adopting bitcoin and no one should wait for their country or city to make a move when you can make the move youself! Adopt your own bitcoin standard and enjoy the benefits
agree i make living by trading but if bank block account that have transfer from exchange my money will be gone cause we don't have btc atm or any thing
I always thought it would be one of the tech heavy Asian countries like South Korea to experiment with the new tech. It turns out to be the Latin America that is taking the charge. I am not familiar with the economic and social variables in that region that motivate these jurisdictions to look into new monetary system. Inflation could one of the reasons. It would be interesting to witness these changes and experience the dominos effect.
I haven't heard much from
AsIa as far as I can see most countries there have some sort of dictatorship going and the influence of China probably counts for a lot not that there isn't motivation for them to defect but I don't see a country that has yet come out and speak positively about it in the region.
Maybe a smaller country like Singapore or something will be the first that side since they are open to finance big time
I think Latin American countries have felt the pain of being marginalised by the US for so long and a history that there's no motivation to stay on the swift system
I'm not saying turning to bitcoin will save your country you can still fuck it up but at least they trying to do something
I might not call it standard yet hehe as it is just one city putting some treasury funds in but definitely another one jumping onboard the crypto train 🚂.
Cheers mate. Nice article
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What would your definition of a city adopting a bitcoin standard be? Cities aren't autonomous regions so they have limited scope to change things they can only adopt a treasury and allow local services and tax revenue in bitcoin
Legal tender laws would be a out of their remit especially in countries that aren't constitutional republics.
As for merchant adoption that can be a localised movement that people can do without government oversight it would just be a like cash transfers so merchants keep it off the books and avoid the income tax
If Canada had a Bitcoin reserve my government would have sold it early just like our former gold reserve. We'd be in the bottom of the doge pile with El Salvador and Brazil on top.
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I heard under JT Canada now has more debt than under all the prime ministers combined! I think they going to keep pushing it since nothing "bad" in the administration eyes has happened which is a shame because there are a few awesome Canadian companies like Ledn, bull bitcoin and blockstream all pushing bitcoin
Maybe it won’t be a government push but more a grass roots push as citizens find their CAD isn’t what it used to be and need something else
The Tax rebate sounds like a great move to get people to buy into BTC. Tax amounts are still given in fiat right? So does this mean that the payment of BTC takes into the price of BTC when you make the payment or whenever the system processes it?
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As far as I understand it yes it's in their local currency you can just settle the amount in bitcoin to claim the discount
Miami and New York have started minting their own cryptocurrency, do you think Rio De Janeiro may do the same?