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Cryptocurrency Key to Financial Independence at Every Level
When we talk about freedom and decentralization we are talking about abstract principles that we hold dearly to. To some that can sound like hot air, but it’s the real-world application of these principles that drives us. When we say cryptocurrency and DeFi will bring more freedom and privacy, we mean it in a measurable, quantifiable way.
Money, as such, has been used as both a tool of freedom and a tool of oppression going back through 10,000 years, as one of our founders has written. Currency manipulation is a standard tool in the government’s toolbox – used for good and ill – and until we have true decentralization, it’s an effective one.
Bitcoin Magazine does a deep dive on Puerto Rico and its independence movement, and how currency manipulation has been used for more than a century against the island. They also look at how cryptocurrency could be a critical tool for independence.
Puerto Rico has seen it all, from currency devaluations, confiscation of wealth, natural disasters, colonizers and fights for independence, all in less than 100 years. Before that, Pedro Albizu Campos fought for Puerto Rico to have its own identity, its own independence and its own sovereignty.
But now the world has a decentralized money that can provide Puerto Rico with the independence and identity that it has been starved for and deserves.
In 1889, Puerto Rico suffered a 40% currency devaluation, crippling the Puerto Rican economy. This was caused by the United States setting up the American Colonial Bank and declaring the U.S. dollar as legal tender (the official money) of Puerto Rico, changing it from the peso.
However, in 1899, one peso was only worth 60 cents, meaning the local businesses of Puerto Rico and its citizens lost 40% of their net worths overnight from causes totally outside of their control. This resulted in Puerto Ricans, attempting to save their net worths, borrowing money from the American Colonial Bank. However, high interest rates made it very unlikely that locals were going to be able to pay back their loans, causing many Puerto Ricans to default on their debt. The result was that the bank seized their assets (in these days, typically their land).
Puerto Rico uses the U.S. dollar as its legal tender and is vulnerable to the consequences of reckless monetary policy, including the expansion of this money supply (inflation), and has already experienced major currency devaluation (as noted above). Looking at the 2020 section of the chart above, during the COVID-19 pandemic, the United States central bank printed about 20% of the total dollars circulating in the economy, flooding the market with dollars. Money printing has devastating consequences on local economies, especially for lower- and middle-income families. Money printing results in a wider wealth gap with goods and services becoming more expensive. Home prices and food prices in Puerto Rico are rapidly increasing.
It's a long piece but definitely worth your time.