Cryptocurrencies are known all over the world. The fall in the rate of fiat currency in one or another country immediately affects the cryptocurrency. Countries with collapsed economies react actively and quickly, most often with sky-high appreciation. But it also depends on the position of the state in relation to digital assets.
Lebanon
This country has become one of those that responded to the depreciation of fiat money with a sharp increase in demand for cryptocurrency. The market also reacted and there was a time when Bitcoin was traded there for $ 15,000, with a world weighted average rate of $ 7,500.
BTC is a very popular financial instrument in the country. Active investments in it were noticed at the beginning of 2020. And all this happens because the population does not trust the national currency. Not surprisingly, the Lebanese pound fell by more than 50% against the US dollar.
This situation worries the state. It is forbidden to process transactions using cryptocurrencies there, and citizens are urged to refuse to buy Bitcoins.
Argentina
This is another country that is trying to keep its currency aways from default amid hyperinflation. Residents of the country are transferring record amounts to digital assets. And the trading volume has increased by 1000% since the beginning of 2018. All this is happening on the background of a fall in the economy, which is approaching default. In April 2020, the state debt of $ 500 million was not repaid. And a pandemic happened.
But it's not just inflation that pushes Argentines to buy coins. One of the important reasons is the growth of the exchange rate. At the time when the country had a limit on the purchase of US dollars (it was reduced from 10,000 to 200), Bitcoin increased to 12 thousand dollars, while the average market indicator was 9 thousand dollars.
As for the attitude of the authorities towards cryptocurrencies, it is very positive. Digital currency is not nationalized, but it is considered as a legal tender. In the interpretation of the Civil Code, crypto coins can also be considered as goods and things. In the country, operations with cryptocurrencies are subject to fairly high taxes, although, to a large extent, this depends on the type of operation. And what is interesting, the country's main crypto enthusiast is the President of Argentina.
Venezuela
Issuing its own currency did not keep the Venezuelan economy from collapse. But amid the fall in the Bolivar exchange rate, Petro began to be used more actively. At the moment, there are a lot of discussions about using digital currencies to pay for oil. Experts believe that this decision will be revolutionary and will allow the global market to reach a new level.
In Venezuela itself, since its launch, Petro has become an important payment instrument. Using digital currency, you can not only pay for goods but it is also used to give salaries to state employees, to pay pensions, and other benefits.
It is also noted that the cryptocurrency in Venezuela shows another feature. It becomes an intermediary in financial transactions in the country, even if there are technical problems provoked by US sanctions. Most often, the internet connection suffers from this.
Ecuador
This Latin American country also found itself in a difficult economic and political situation. Interest in cryptocurrency has also increased here. And cryptocurrency trading is prohibited there at the legislative level. But it is interesting that mining is not banned, so it is carried out using cloud computing.
Among local residents, the favorites are such currencies as Bitcoin, Ethereum, Ripple, Litecoin, and some others. There is also an alternative local cryptocurrency Sucre Coin. The principle of its operation is similar to the same currencies in Venezuela, Chile, and Peru. Of course, this tool does not have the advantages of classic digital money.
The interest in modern digital assets is great, so one of the local companies even created something like a training course on how to use cryptocurrency correctly.
Brazil
In this country, the economic situation is not the most catastrophic, but there are many problems, which may cause a deep economic crisis soon. Yet in Brazil, cryptocurrencies are actively popularized. Even more, with their help, it is possible to pay the cost of travel in public transport and even in supermarkets. That is, unlike many Latin American countries, they decided not to prohibit cryptocurrencies.
Even more, the issue of developing a national digital currency is already being actively discussed. So in the summer of 2020, the Brazilian central bank began to study the consequences of launching its own digital currency CBDC. Even more, this group is developing an indicative model of future currency.
Mexico
In pre-default Mexico, cryptocurrency also became very popular. But the authorities did not like it and they quickly reacted with very strict rules concerning cryptocurrencies. They were not banned, but they did everything to make digital money not very convenient and profitable to use.
Essentially, cryptocurrencies cannot be offered by regulated financial companies. Thus, the country's Congress passed a law that regulates fintech companies. It provides that if the service stores fiat funds or digital assets, it must obtain a license from the national regulator. Most exchanges are required to hold assets. In fact, the law has entrusted the Mexican central bank to determine which cryptocurrencies are allowed to be placed by these regulated companies. Many expected a list of currencies to be developed, or at least the criteria by which they would be selected.
For 11 months out of 12 that were given for the development of the regulator's work, there were neither lists nor rules. And at the very end of the allotted period, the Central Bank issued special rules. They actually did not allow regulated companies to offer any cryptocurrency.
Of course, the reaction of the crypto community was not very positive and the law was criticized. Experts are confident that due to the use of cryptocurrency, it is possible to develop an economy of the country, which is the sixth most popular tourist destination in the world. And such restrictions can significantly slow down the process.
Cryptocurrency in Mexico was equated to a commodity. In practice, it is national because it has the same restrictions as fiat money. But there is still hope that in that region, the official status of the cryptocurrency will still be determined.
Iran
This is another country, which is in a pre-default state. And there is every chance of reaching the critical point for the economy. A couple of years ago, the country prohibited the use of crypto coins in all possible ways, creating barriers to this process. But in 2020, the Tehran government is increasingly turning its laws towards digital currencies. And the state even issues licenses for companies that are engaged in currency mining.
In addition, the population of the country is trying to save their accumulated money in every possible way. According to many, this is possible by investing them in cryptocurrencies. In the US, they believe that the active use of cryptocurrencies is one of the options to avoid sanctions. And mining itself receives an additional incentive. The prices of oil and natural gas are falling, and this enables the Iranian authorities to allow an increase in the consumption of a cheap resource. Based on this, we can say that in the production of digital assets, restructuring has been outlined.
In other countries, where inflation consumes fiat money, the situation is approximately the same. If cryptocurrencies are not prohibited at the state level, then their rate is actively growing, and people are trying to invest in crypto coins. And sometimes states decide to help. They allow mining cryptocurrency. But still, there is no exchange and no payments.