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

kragen 5y ago
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 5y ago
  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 5y ago
    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 5y ago
      If the currency is in a bank that deals with the US it could be seized. Bitcoin doesn't allow this.
      - acdha 5y ago
        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.
        ipaddr 5y ago
        In this situation you would use an exchange in a friendly country.
        acdha 5y ago
        … which doesn’t do any business with any entity participating in that financial regulation system … whose customers either don’t intend to ever do so or have lowered their price to reflect those restrictions Again, note that I’m not saying it’s impossible to work around the edges of the system but it will have real costs which many people aren’t interested in dealing with or will want to be aggressively compensated for.
        kragen 5y ago
        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.
        5y ago

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 5y ago
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 5y ago
  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 5y ago
    If the currency is in a bank that deals with the US it could be seized. Bitcoin doesn't allow this.
    - acdha 5y ago
      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.
      - ipaddr 5y ago
        In this situation you would use an exchange in a friendly country.
        acdha 5y ago
        … which doesn’t do any business with any entity participating in that financial regulation system … whose customers either don’t intend to ever do so or have lowered their price to reflect those restrictions Again, note that I’m not saying it’s impossible to work around the edges of the system but it will have real costs which many people aren’t interested in dealing with or will want to be aggressively compensated for.
      - kragen 5y ago
        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.
        5y ago