Thursday, May 24, 2018

Argentine bank dumps SWIFT for Bitcoin is helping facilitate currency swaps

Despite the fact that the U.S. dollar is the world's recognized reserve currency, swapping out one's own domestic currency for another carries with it intrinsic costs.  And this has always been one of the big benefits for the U.S. as it is able to grab a bit of 'vig' or interest on every transaction that goes through SWIFT.

So with this being said, the nation of Argentina is finding it less economical to use SWIFT at a time when their own currency is hemorrhaging value.  And in a new report out on May 23, one Argentine bank has decided to bypass SWIFT and allow individuals, businesses, and entities to instead use Bitcoin as a medium of exchange since the cost of doing so will be much cheaper than the current standard.

As the BCRA and Argentine government desperately shore up confidence in their collapsing currency, NewsBTC.com's Tim Copeland reports that Argentine bank, Banco Masventas (BMV), has revealed a partnership with Bitex to allow customers to make cross-border payments in Bitcoin
They aim to utilise Bitcoin as a low-fee cryptocurrency which can be transferred across borders and easily exchanged for fiat currencies. 
Bitcoin enables transfers to be made without using third parties and does not rely on any trusted parties. Instead, it uses a network of nodes that validate transactions and uses incentives to ensure that the network operates accurately. It also uses cryptography, such as hash functions, to ensure that only the person who holds their Bitcoin can spend it as well as providing a public ledger to ensure accountability. - Zerohedge
Ironically if this experiment proves successful, it could open the door for more financial institutions, including sovereign ones, to switch to Bitcoin or other established cryptos since it means a nation could easily bypass sanctions imposed upon them by the United States. 

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