Monetary Policy. Can someone explain how a country plans to implement a monetary policy (e.g. inject new currency during a recession to fund expansion) when they don’t control their national currency (Bitcoin).
It seems their monetary policy is remittances. My guess is ppl will quickly cash out to dollars. But how will the dollars get back to the local exchanges unless people are buying bitcoin there? This seems like a disaster in the making.
Scenario: I want to send my mom $1,000. That would cost me $200 with a remittance, but it's only $20 with Bitcoin. Success! I send her the $9980. Now my mom has $9980 equivalent in Bitcoin. So she goes to the store. The local grocery store has to accept Bitcoin, so she buys up stuff. Success!
Suddenly the grocery store needs to pay its bills. It pays its suppliers in Bitcoin. Success!
The suppliers' suppliers, who are importing many of these goods from abroad, say FUCK NO and don't accept Bitcoin, they need hard cash. Or perhaps the farmers who grow the crops need to purchase fertilizer from abroad, same story. Okay, the suppliers need to convert their Bitcoin to dollars, piece of cake, right? Suddenly there's a problem: Bitcoin is converted to dollars only when dollars are going to be sent out of the country, and suddenly all of those Bitcoin transactions need to be backed up by USD. USD which never flowed into the country in the first place, because I sent BTC and not USD. Suddenly USD is much more scarce than BTC. That sinks the exchange rate.