{"id":546024,"date":"2023-01-31T21:09:18","date_gmt":"2023-01-31T18:09:18","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/opinion-have-brazils-lula-and-argentinas-fernandez-heard-of-cryptocurrency\/"},"modified":"2023-01-31T21:09:18","modified_gmt":"2023-01-31T18:09:18","slug":"opinion-have-brazils-lula-and-argentinas-fernandez-heard-of-cryptocurrency","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/opinion-have-brazils-lula-and-argentinas-fernandez-heard-of-cryptocurrency\/","title":{"rendered":"# Opinion: Have Brazil\u2019s Lula and Argentina\u2019s Fernandez heard of cryptocurrency?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a22c2cb69a16\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a22c2cb69a16\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/opinion-have-brazils-lula-and-argentinas-fernandez-heard-of-cryptocurrency\/#%E2%80%9D_Opinion_Have_Brazils_Lula_and_Argentinas_Fernandez_heard_of_cryptocurrency_%E2%80%9C\" >&#8221; Opinion: Have Brazil\u2019s Lula and Argentina\u2019s Fernandez heard of cryptocurrency? &#8220;<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Opinion_Have_Brazils_Lula_and_Argentinas_Fernandez_heard_of_cryptocurrency_%E2%80%9C\"><\/span>&#8221; Opinion: Have Brazil\u2019s Lula and Argentina\u2019s Fernandez heard of cryptocurrency? &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div class=\"post-content\" data-v-5a4050f8>\u201cGood ideas out of context are like shiny objects lost in a dark field,\u201d American writer Seth Godin once said. \u201cThey catch your attention, but have no real utility.\u201d<\/p>\n<p>Brazilian President Luiz In\u00e1cio Lula da Silva and Argentine President Alberto Fern\u00e1ndez have been making headlines for a proposal to create a common currency between Argentina and Brazil. The idea for a common currency<strong> <\/strong>arose about 25 years ago in an <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/web.bndes.gov.br\/bib\/jspui\/bitstream\/1408\/16505\/1\/PRFol110125_Hacia%20la%20creacion%20de%20uma%20moneda%20comun_compl_P_BD.PDF\">article<\/a><strong> <\/strong>written by two renowned economists and, in the context of the time, made sense. This idea has now been resurrected as a political opportunism play with a hint of ideological propaganda, but it lacks real utility.<\/p>\n<p>In 1998, both the Argentine and Brazilian governments implemented neoliberal measures in the economy, including a fixed exchange rate regime, with a conversion rate close to 1:1 between the United States dollar and their respective local currencies. A lot has changed in the 25 years that followed. Both countries went through similar political cycles, with the predominance of Peronism in Argentina and Petism in Brazil. (Peronism was a populist political movement created around President Juan Per\u00f3n ideas; Petism was a left-wing political movement led by the Brazilian Workers\u2019 Party.)<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Crypto\u2019s downturn is about more than the macro environment<\/em><\/strong><\/p>\n<p>However, the economies of both countries have evolved in vastly different ways. The Brazilian real, which was close to one Argentine peso back in 1998, today is worth more than 35 pesos considering Argentina\u2019s official exchange rate, which is, knowingly, overvalued. Part of the peso\u2019s devaluation can be explained by the two defaults in Argentine sovereign debt in the period.<\/p>\n<p>Another anecdotal symptom of the chaotic state in which the Argentine economy is found is the proliferation of different official exchange rates for specific purposes. Some examples include the so-called \u201cColdplay dollar\u201d for contracting international shows, and the \u201cQatar dollar,\u201d which was used by Argentine fans in the last World Cup. (In football, Argentina is on top. But in economic terms, Brazil is winning by a large margin.)<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2023-01\/917580fc-eb72-44a0-b7b3-a4fa86d51cef.jpg\" alt=\"\" title=\"\"><figcaption style=\"text-align: center;\"><em>Strength of the Argentinian Peso (ARS) and Brazilian Real (BRL) compared to the U.S. dollar (USD), 2004-Present. Source: TradingView<\/em><\/figcaption><\/figure>\n<p>In 2023, Peronism and Petism are simultaneously in power once again. The ideological affinity between the two governments acts as a propellant for bizarre ideas, such as the creation of a common currency (in the current context). Ideologies are often used to conceal mundane interests, and this case is no exception.<\/p>\n<p>The proposal for a common currency itself is completely empty. It would not be viable, given the huge disparity between the two economies and would not solve the problem of lack of foreign currency for import in Argentina. However, like a shiny object in the dark, it attracts attention. And one of the factors that contributed to this awareness is the fact that it was announced that the currency would be digital. There is great confusion between digital currencies and cryptocurrencies, which are very popular both in Argentina and Brazil. In the proposal, the currency would be issued by a central bank and, therefore, would not be decentralized like cryptocurrency.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Brazil could cement its status as an economic leader thanks to 2024 CBDC move<\/em><\/strong><\/p>\n<p>However, behind the smokey curtain of the common-currency proposal, there is something related to cryptocurrency. Two reasons cited for the initiative are escaping the dollar hegemony and strengthening resistance to any future sanctions. Crypto advocates share similar goals. For instance, one Harvard Ph.D. candidate has proposed incorporating cryptocurrencies into countries&#8217; international reserves as a kind of insurance against sanctions. It is quite remarkable that national governments are echoing these two crypto mantras, especially in peaceful times.<\/p>\n<p>The common currency proposal, in a best-case scenario, is only a rhetorical play that will decay through time and vanish completely at some point. In normal circumstances, this would be very likely, given that Brazil has nearly nothing to profit from this initiative. But there are some warning signs from the past. <\/p>\n<p>Just consider Brazilian Finance Minister Fernando Haddad, who is prone to unorthodox ideas. When he served as S\u00e3o Paulo\u2019s mayor, for example, he implemented a plan to fight the crack epidemic by giving money to addicts \u2014 causing crack prices to spike on payment days. Consider also that the Workers\u2019 Party has a long track record of creating ingenious mechanisms for favoring countries with ideologically aligned governments at the expense of Brazilian taxpayers.<\/p>\n<p>Time will tell if the common currency plan becomes reality. As Llewellyn Rockwell said, \u201cNever underestimate the power of bad ideas. They must be refuted again and again.\u201d<\/p>\n<div>\n<div style=\"background: rgb(239, 239, 239); border: 1px solid rgb(204, 204, 204); padding: 10px;\"><strong>Jo\u00e3o Marco Braga da Cunha <\/strong>holds a doctorate in electrical and electronics engineering from the Pontifical Catholic University of Rio de Janeiro. He has a master of <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/sciencee\/\" data-internallinksmanager029f6b8e52c=\"5\" title=\"Science\" target=\"_blank\" rel=\"noopener\">science<\/a> in economics from Funda\u00e7\u00e3o Getulio Vargas.<\/div>\n<\/div>\n<p class=\"post-content__disclaimer\"><em>This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author\u2019s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.<\/em><\/p>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/opinion-have-brazil-s-lula-and-argentina-s-fernandez-heard-of-cryptocurrency\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Opinion: Have Brazil\u2019s Lula and Argentina\u2019s Fernandez heard of cryptocurrency? &#8220; \u201cGood ideas out of context are like shiny objects lost in a dark field,\u201d American writer Seth Godin once said. \u201cThey catch your attention, but have no real utility.\u201d Brazilian President Luiz In\u00e1cio Lula da Silva and Argentine President Alberto Fern\u00e1ndez have been&#8230;<\/p>\n","protected":false},"author":1,"featured_media":546025,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/s3.cointelegraph.com\/uploads\/2023-01\/c946c772-60cc-4dca-b067-c6fd9e90e4ef.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74863,76853,79490,74355,22845,22483,5069,124264,32681],"class_list":["post-546024","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-cryptocurrencies","tag-latin-america","tag-south-america","tag-adoption","tag-argentina","tag-brazil","tag-economy","tag-globe","tag-politics"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/546024","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=546024"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/546024\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/546025"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=546024"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=546024"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=546024"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}