Israel, El Salvador, and China pivot on Crypto

Several countries have had drastic changes with their stance on Crypto. Israel, El Salvador, and China all made huge moves that have had major repercussions throughout the globe.

Recently there has been a lot of turmoil in China involving Crypto since the CCP declared a hard crackdown on Crypto mining companies in the Sichuan Province. According to reports from CNBC.

"90 percent of all crypto mining operations in China are expected to shut down. It is estimated that between 65 to 75 percent of all mining in the world took place in China."

Luckily, this has an adverse effect for the rest of the globe. Several Chinese mining companies have their eyes on moving business to the US. Specifically, Texas given it has a very decentralized power grid and pro-friendly crypto stance. As of 2019, 20 percent of all energy in Texas came from wind. Texas also offers some of the lowest energy prices throughout the world which brings bigger profits for mining companies.

Israel within the last week as adopted the idea of creating a digital Shekel. Israel has been in talks and development of a digital currency since 2017. The digital Shekel will run on an Ethereum based blockchain. In The Jerusalem Post last week, Bank of Israel Deputy Governor Andrew Abir stated.

“The payment system in Israel is at least a decade behind other countries,” he said.

“But in the last year, we have started to close the gap with the distribution of the infrastructure that allows contactless payments and the entry of digital wallets.

“We are in the middle of a process of disruptive technology, and we do not know who are going to be the winners. Will it be the banks, credit-card companies, fintech or big technology companies? There will be changes in the next few years that we do not yet know about. But it is clear that the environment in five years’ time will not be the same as the environment today."

Israel has high hopes for their digital Shekel but are still skeptical whether it will pan out in the future. If successful, Israel might become a trailblazer for other countries to follow in building their own digital currency.

El Salvador has gone all in on Bitcoin. On June 14th, El Salvador became the first country to adopt bitcoin as a legal tender. Most of El Salvador's economy comes from money sent back abroad. Forbes covered President Nayib Bukele who stated,

“This initiative he hopes will boost foreign investment, improve financial inclusion, and generate jobs”

Since El Salvador lacks a stable currency, the idea to adopt bitcoin could bring wealth too many of its citizens. Although there are concerns of Bitcoin's volatility, long term it could offer a stable currency. The question moving forward is that if more Latin American countries adopt Bitcoin as a currency will the domino effect continue to the more developed countries?

Bo Bennett