Someday soon, the dollar will die. Fiat currencies are a house of cards—a fatally fragile and uneven structure waiting to be toppled by the stiff winds of hyperinflation. The U.S. greenback may be the last card to fall, but fall it will.  

‍

And when it does, the blockchain will catch us.

‍

So says our guest on this week’s episode of Let’s Talk Markets. Byron Wiebe is head of communities and communication for Loopring, a groundbreaking open-sourced payment protocol powered by Ethereum.

‍

If you come from the “burn the motherfucker down” school of thought, Bryon’s chilling vision of things to come should be music to your ears. After all, Bryon says that shit is already going up in flames, that the writing is already on the wall for traditional currencies and centralized banks.

‍

They had their chance, and they blew it. We deserve something better, and blockchain holds the key to unlocking this something.

‍

If this whole premise sounds far-fetched and fantastical to you, we should mention that, where Byron lives, this is already closer to reality than prediction. Though Canadian born, Byron lives in Argentina. Things there are…not great.

‍

Let’s assume Byron is right, and that centralized state currencies are treading the path to their own ruin. If so, Argentina is the canary in the coal mine. At greater than 120% inflation, the Argentine Peso has failed. And in a nation of more than 45 million, roughly half have sought some refuge in cryptocurrency.

‍

The Land of Silver

‍

Ok, let’s back up the train just a few stops. As we write this, the South American nation of Argentina is in the midst of a heated presidential election runoff. On November 19th, Argentinians will go to polls to choose between Sergio Massa who, as Minister of Economy since 2019, has overseen the worst inflation in the nation’s history; and Javier Milei the populist challenger who, seeing a currency on life support, is threatening to pull the plug.

‍

In early October, Milei declared that the national currency wasn’t worth “excrement.” He has repeatedly pledged that his presidency will abandon the peso and move the nation to the U.S. dollar.

‍

To those charged with the unenviable task of keeping the peso afloat, this did not help. Indeed,  the Argentine government has sought with little success to prop up its own fiat currency—mostly by stifling the supply of foreign dollars to its own citizens.

‍

Black Market Bucks

‍

In response, citizens have sought escape from their own sinking currency in the black market.

‍

There, you can buy U.S. dollars at increasingly inflated rates. At the start of 2023, you could enter one of these black markets and pay 400 pesos for $1 U.S. dollar. By September, that number was closer to 700. And in October, after the far-right libertarian presidential candidate issued his scatalogical assessment, the cost spiked to more than 1000 units of excrement per dollar.

‍

Peace Out, Peso.

Milei supports the peso’s total destruction and is actively placing his thumb on a scale already heavily weighted in that direction.

‍

For some perspective, Milei also brandishes a chainsaw at campaign appearances, believes there should be more guns in the streets, and is strongly in favor of deregulating the commercial sale of human organs. Milei is pictured below, presumably returning cold soup at a deli.

‍

Believe it or not, his challenger has suggested—without mentioning any specific names—that presidential candidacy should require a test of mental competence. Moreover, outgoing President Alberto Fernandez recently issued criminal charges against Milei, invoking a section of the penal code that allows for punishment of deeds that "inspire public fe

ar or provoke tumult or disorder.”

‍

Milei is accused of intentionally torpedoing an already sinking currency, a charge that could carry a two to six year sentence. While this may raise the temperature in an already red hot presidential election, it does nothing to restore the public’s faith in the peso.

‍

With respect to Argentina’s dollarization, Milei may just get his wish, whether he ends up in jail, wins the presidency, or both.

‍

But there’s a subplot here…

‍

In Bitcoin We Trust?

‍

While the two leading candidates in the presidential race wrestle over the future of their fiat currency, the people of Argentina may join Venezuelans and El Salvadorans as the first to evolve away from fiat currencies altogether—and this, by virtue of necessity.

‍

And this brings us back to Byron and Loopring. Byron has front row seats for this whole mess. And what he sees, beyond a central government and a central bank that are together failing their people, is a people seeking refuge outside the boundaries of traditional finance.

‍

While Americans are reading the most embarrassing highlights from Sam Bankman-Fried’s criminal trial and wondering whether we can really trust cryptocurrency, a record number of Argentines have come to view crypto as the only thing they can trust.

‍

As Byron explained to us, roughly half of all Argentinians are grabbing onto cryptocurrency as a life raft while their own peso spirals down the drain. Byron also represents a company that aspires to replace a failing system with something that actually works—a trustless, decentralized ecosystem where each of you gets the opportunity—in Loopring’s words—to “be your own bank.”

‍

For more on that, and how Loopring makes it all possible, we strongly urge you to check out this week’s podcast. Again, if you’re all about the collapse of the system, you’re gonna love it.

‍

But in the scope of this article, we’re more interested in spotlighting the dire conditions that might truly bring Byron’s forecast to fruition.

‍

“One day,” Byron writes in an article for The Medium, “NFT ownership could be at the core of almost everything, in the meta verses (virtual reality) and also the meat spaces (physical reality).”

‍

Ok. For one thing…meat spaces. That’s both funny and makes me want a burger. Second, this idea, that our financial lives might one day be lived entirely on the blockchain…it’s not so far-fetched when you look at Argentina.

‍

According to WorldCoin.org, Latin America is generally among the fastest-growing regions for crypto adoption, and Argentina’s growth is uniquely robust among its neighbors. (Quick side note on WorldCoin–These dudes are offering users cryptocurrency in exchange for retinal scans. Pretty sure we don’t need to explain why this is a hideously dystopian gimmick, a dangerous privacy risk, and just plain creepy.)

‍

That said…

‍

WorldCoin reports that Chainanalysis "ranked Argentina 13th in its 2022 Global Crypto Adoption Index. Researchers at Chainalysis note that stablecoin adoption in Argentina is exceptionally high, allowing Argentineans a refuge from high local inflation. On-chain data over 2021–2022 found that people paid USD-pegged stablecoins, such as Tether (USDT) and USDC or USD for a sizable minority of payments.”

‍

Most notably, citizens of Argentina—according to a survey from Morning Consult—hold cryptocurrency in higher regard than do the citizens of literally any other nation. Some 60% of surveyed respondents said that they had either “some” or “a lot” of trust in Bitcoin.

‍

Living in a state approaching hyperinflation, and facing an electoral choice in which neither candidate can really be trusted with stewardship of the peso, Argentinians would sooner trust the trustless.

‍

It’s also worth noting that this is not Argentina’s first rodeo. The people of Argentina endured a Great Depression that persisted from 1998 to 2002. It was a time marked by massive unemployment, riots, and the collapse of a government. It also marked the end of the peso’s fixed exchange rate with the U.S. dollar and sparked a move toward alternative currencies. So the public’s mistrust of its own currency is already well ingrained. 

‍

Interestingly, while those surveyed by Morning Consult trusted Bitcoin more than their own peso, they still collectively viewed the U.S. dollar as a more reliable long term investment than either.

‍

But is the U.S. dollar a reliable long term investment?

‍

Well…Define Long Term

During our podcast, Byron offered a pretty stark warning. The fiat system is unsustainable, writ large. What’s happening today in Argentina will happen everywhere. The dollar is merely a temporary refuge. It may simply be the last domino to fall.

‍

For a deep dive into just how precarious these dominos are, we’d recommend a look at Peruvian Bull’s harrowing assessment, which points to the finger squarely at the U.S. Here’s just a taste of the apocalyptic sentiment that follows:

“We are at the end of a MASSIVE debt supercycle. This 80–100 year pattern always ends in one of two scenarios- default/restructuring (deflation a la Great Depression) or inflation (hyperinflation in severe cases (a la Weimar Republic). The United States has been abusing it’s privilege as the World Reserve Currency holder to enforce its political and economic hegemony onto the Third World, specifically by creating massive artificial demand for treasuries/US Dollars, allowing the US to borrow extraordinary amounts of money at extremely low rates for decades, creating a Sword of Damocles that hangs over the global financial system.”

‍

That sounds bad.

‍

And it will be. But…but…here’s the grayish-silver lining. We already know that our banking system is built on warped incentives, destructive conflicts of interest, and by-design inequality. This collapsing system isn’t working for us. In Byron’s view, our collective departure from this system in search of something that actually works is a matter of inevitability. 

‍

And Byron and Loopring envision a perfectly cromulent future in which embiggened blockchain capabilities make it all possible. In other words, as the crypto space scales upward, becomes more user friendly, and offers solutions for itchy problems like losing millions of dollars by simply misplacing the sheet of paper containing your keyphrase, there may well be a not-too-distant future in which we all seek refuge from an unfair system.

‍

We’re not there yet, Byron acknowledges. But “we’re getting closer everyday.”