Given the bitcoin supply currently in circulation and a price close to $ 9,500, its use to settle the foreign debt of some Latin American countries is quite flattering.
In a hypothetical case where some of these countries – or the holders of BTC – chose to use all of the circulating Bitcoin to pay off their foreign debt, at least nine Latin American countries could easily do so.
The countries in question would be Uruguay, Ecuador, Peru, Colombia, Costa Rica, Guatemala, Honduras, Bolivia and Nicaragua. For this group of countries, the average foreign debt is around 22 percent of the demand for bitcoin in circulation. to terminate their international obligations.
Currently, the total circulating supply of Bitcoin according to the market indicator for cryptocurrencies CoinMarketCap is around 18,427,250 BTC, which is almost the case 88 percent of the 21 million units coined in the Nakamoto white paper.
The data correlated between each country’s external debt based on information gathered by its official institutions and the total Bitcoin supply Colombia is the country where BTC is currently in greatest demand. with 80.67% of the 18 million units available.
The table above also reflects that the small Central American nations of Guatemala, Honduras and Nicaragua need the least BTC to pay all of their foreign debt. an average of minus six percent.
On the other hand, Bolivia is the fourth country with the least circulating BTC demand to meet its commitments and includes a group of countries along with the above You only need a percentage of the current total Bitcoin amount to pay off your foreign debt.
It’s even more interesting All of Bitcoin’s current supply would allow the global external debt of at least 7 countries to be reduced of this group examined: Bolivia, Honduras, Nicaragua, Guatemala, Costa Rica, Uruguay and Ecuador.
For this group of seven countries They will only need 80.19% of the 18 million BTC units currently in circulation to pay all of their foreign debt.
Not enough for them
In a negative context The foreign debt of countries like Venezuela, Argentina, the United States or Spain is so high that not even the 21 million Bitcoin that are to be put online at the current price would enable them to meet their obligations.
Venezuela and Argentina need more than 100 percent of Bitcoin’s current offering to cancel their commitments.
The situation worsens if we move to countries with larger economies in the region, such as Mexico and Brazil, which, in the case of the southern giant, which has the tenth economy in the world, require up to 800 percent of the current Bitcoin supply.
The most negative grade is for the United States and Spainwho, because of their terrible budgetary situation, have been forced to print so much money without backing and go into debt to balance their coffers, with an increasingly bleak future due to the current situation of the corona virus that it is not possible to repay their obligations despite everything current cryptocurrency market.
With a record $ 23 trillion for the U.S., the situation is unthinkable when Bitcoin is fully utilized to eliminate its foreign debt, even with an average asset price of $ half a million, as some adventurers predicted.
Top 100 richest bitcoin wallets
According to Bitinfoncharts data, there are 100 Bitcoin wallets that have at least 15 percent of the currently circulating offer the market leading cryptocurrency.
If you put all your wealth together to pay off the Latin American nations’ foreign debt, Your balance would only be sufficient to pay the amounts from countries such as Bolivia, Honduras, Nicaragua and Guatemala.
The 100 richest Bitcoin wallets in their favor have an average balance of just over $ 25 trillion at the current exchange rate, which is around 2.69 million BTC.
These purses, which are often cataloged as Bitcoin whales, could perfectly take on the sovereign debt of one of the above countries. something that in practice would be equivalent to “owning” these nations.
The richest wallet on the list corresponds to the cold store of the Huobi exchange, which has a balance of 255,502 BTC in favor of approximately $ 2,413 million.
His balance would hardly be enough to settle a quarter of the smallest foreign debt of the group of countries examined, which corresponds to the Central American nation of Guatemala.
A scourge that doesn’t end
A country’s external debt is defined as the set of obligations that a country has towards other countries or institutions. It is usually in the hands of foreign creditors, be it individuals, financial institutions like the IMF, WB or governments.
Under normal conditions, loans are granted to cover investments in large infrastructures or to cover unforeseen costs due to natural disasters.
However, the region has long had macroeconomic disasters that, regardless of their ideology, had different countries, which led to a recurring practice of debt cycle by cycle and created a spiral of inflation debt that was impossible for the vast majority of countries to pay.
Despite the oil price boom in the past decade, producing countries like Venezuela have been unable to save the extraordinary funds from oil exports that would allow them to meet their debt obligations.
The current pandemic situation promises a darker scenario for many countries in the region, and in this sense some economies have already started to improve the balance of their external debt through new loans to government institutions.
All of this forces you to stop learning To what extent can traditional financing systems be implemented in our economies without the support of disruptive technologies such as blockchain? This enables us to emulate more transparent and advanced systems that focus on digital currencies and enable a circular economy to offset the efforts that each of its citizens make for the sustainable development of a nation.
Currently, not all of the Bitcoin in circulation with all the power it represents for the decentralized alternative finance market may be enough to remove the scourge in the region at least at the current price.
The views and opinions expressed here are solely those of author and do not necessarily reflect Cointelegraph’s views. Every investment and trade movement involves risks. You have to do your own research when making a decision.