Brazil and Argentina Prepare for Common Currency, Can Bitcoin Be the New Trade Currency?

Amid the changing dynamics of global geopolitics and the rising US debt, countries across the world have been mulling for an alternate form of money, other than USD, to settle trades.

As per the latest development, the Latin American countries of Brazil and Argentina announced that they are working on a common currency. During the Buenos Aires Summit this week, South America’s two largest economies shall discuss further plans.

As per the details, the focus will be on using the new currency to boost trade and reliance between the two nations and reduce the dependency on the U.S. Dollar. Speaking to Financial Times, Argentina’s economy minister Sergio Massa said:

“There will be . . . a decision to start studying the parameters needed for a common currency, which includes everything from fiscal issues to the size of the economy and the role of central banks. It would be a study of mechanisms for trade integration. I don’t want to create any false expectations . . . it’s the first step on a long road which Latin America must travel.”

Could Bitcoin Play A Role Here?

As per the existing plans, the new currency dubbed “sure” (South) shall be instrumental as a bilateral project. Later, the two countries plan to expand this bilateral project by including more nations.

However, challenging the hegemony of the USD is going to be an uphill task for everyone in the long term. Again, building trust in fiat currencies is going to be tough since they are controlled by central banks.

Coinbase chief Brian Armstrong suggested moving to Bitcoin could be the right option. Bitcoin’s decentralized ledger and supply cap makes it a store of value and reduces dependency on any particular central bank. Commenting on it, Armstrong wrote:

“Wonder if they would consider moving to Bitcoin – that would probably be the right long term bet”.

Bitcoin is once again getting greater attention as users worldwide seek to break free from fiat currency amid rising global debt and falling economic output. This month, Bitcoin gave a healthy price pump with nearly 33% gains since the start of 2023. On the other hand, the Fed is likely to continue with its rate hike program as inflation still remains high.