A person needs 335 million guaranies to be able to buy a whole Bitcoin. The depreciation of Paraguay’s fiat currency and the boom in the price of Bitcoin have been key elements.
The weakening of Paraguay’s national fiat currency the Guarani (PYG) to Bitcoin (BTC) is increasing. A person currently needs the smallest unit of the cryptocurrency, 1 satoshi, to buy 3 guaranies. This is a clear sign of the pullback that this unit of exchange is experiencing.
The boom in the price of the pioneering cryptocurrency and the depreciation of the guarani over the years have influenced that situation. Currently, a full Bitcoin is equivalent to around PYG 335 million.
Annual inflation in Paraguay has remained in single digits in the last 10 years, but the accumulated since 1999 exceeds 120%. As if that were not enough, the economic situation that the COVID-19 pandemic has created has also had its effects on the country.
The recent bullish run of Bitcoin, in addition to the mistakes and successes in macroeconomics or monetary policy, has made the weakness of the guarani more evident. According to data from CoinGecko, the price of Bitcoin has skyrocketed from USD 11,500 to around USD 48,000 in six months.
In a few words, 1 satoshi (0.00000001 BTC) is currently equivalent to around 0.00048 US cents, which is far above the Paraguayan guarani. According to the satparity.org website, Paraguay’s national fiat currency is among more than 40 that are worth less than 1 satoshi.
The value of other national Latin American fiat currencies has also fallen below 1 satoshi. These include the Venezuelan bolivar (VES), the Jamaican dollar (JMD), the Argentine peso (ARS), the Colombian peso (COP), the Uruguayan peso (UYU), and the Dominican peso (DOP). Likewise, the Nicaraguan Cordoba (NIO) and the Honduran lempira (HNL) are part of this list.
Bitcoin is one of the Largest Assets in the World
Bitcoin is increasingly consolidating its position in the cryptocurrency market since it is one of the largest assets in the world according to total capitalization. By last January, Bitcoin was already more valuable than companies like Facebook or Tesla, among other prominent companies.
What is happening to Bitcoin and the weakening of national fiat currencies recently had an impact on the Nigerian parliament. Senator Sani Mohammed Musa said that Bitcoin had made his country’s fiat currency, the naira (NGN), “almost useless or worthless.”
Despite these claims, the depreciation that the naira and many other national fiat currencies experience on a global scale is not Bitcoin’s fault. Rather, this situation has arisen as a consequence of mistakes in money matters.
A growing number of companies are investing in Bitcoin and payment processors like Visa and MasterCard are already testing the cryptocurrency. Additionally, there are new technological advancements on the network (Taproot, Schnorr, Lightning Network) and increased regulation on the crypto asset worldwide. All of this has served as fuel to increase adoption of the cryptocurrency that Satoshi Nakamoto created.
By Alexander Salazar
