Can Cryptocurrency help you Survive a Currency Crisis?
Cryptocurrency and other new financial technologies can help average people survive a currency crisis. That is important because currency crises are the most destructive economic crises for average people.
Government money suddenly loses all, or most, of its value in a currency crisis. Argentina and Turkey are experiencing currency crises right now. The Argentine Peso lost over 45% of its value in the first eight months of 2018, CNBC estimated.
That means the average Argentine’s salary lost 45% of its buying power this year. Therefore, the Argentine can only buy 45% of the food she could purchase in January 2018. Every citizen of Argentina has experienced the equivalent of a 45% pay cut in 2018.
How a Currency Crisis Hurts Everybody
The cruelest aspect of a currency crisis is that until recently there was no way for most people to escape one.
Only the rich, those with access to foreign currencies, or people with something to barter can escape currency crises. A farmer can survive a currency crisis by bartering food to his neighbors, a teacher lacks that option.
During a currency crisis average people watch as their salaries, businesses, savings, and investments lose all value. Historically, there was little average people could do to survive a currency crisis, beyond buying precious metals or real estate.
Gold is little help in a currency crisis because there are few places you can spend it. Supermarkets and gas stations do not accept gold payments. Nor do landlords, tax collectors, or mortgage companies.
Real estate is even less flexible than precious metals. It might be possible to pawn gold or trade it for food. No supermarket will accept a property deed for a cart full of groceries.
How Cryptocurrency Can Help You Survive a Currency Crisis
Fortunately, modern technology gives average people the tools to protect their wealth and feed their families during a currency crisis. Those tools are cryptocurrency, smartphones, and digital wallets.
Unlike gold, cryptocurrencies can be bought and sold digitally. Anybody with a bank account or credit card can purchase cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and Rubius (RUBY).
Cryptocurrencies provide protection from currency crises; because they provide an alternative to fiat currencies. Few cryptocurrencies are government-backed so the market determines their value.
You can protect your money from a currency crisis by converting it into a market-based cryptocurrency. The drawback is that it is hard to spend cryptocurrencies in the real world. But, some places in the world are starting to become more crypto-friendly. Some states, like Wyoming, allow you to pay your taxes in cryptocurrency.
Currently, people in Venezuela have to use cryptocurrencies to purchase gift cards. They use the gift cards to make purchases from retailers like Amazon and Walmart. Then pray they can have the orders shipped to their homes.
How Smartphones and Digital Wallets Can Help
Smartphones and digital wallets can give average people the means to buy and sell without fiat currency.
For example, a cryptocurrency point-of-sale (POS) terminal could enable a supermarket in Argentina to take Ethereum (ETH) payments. Shoppers could pay for groceries with Ethereum through digital wallets on their smartphones. A near field communications (NFC) payment app like Apple Pay; or a Quick Read (QR) Code payment solution like WeChat Pay, would make the purchase.
Rubius Inc., a U.S.-based fintech startup, is focused on developing the financial tools to make consumer crypto-payments possible. Their cryptocurrency, called Rubius or RUBY, will be the most integral part of their future products.
How Rubius Can Help People Survival Currency Crises
Rubius Inc. has plans to develop POS terminals and payment gateways to make crypto-payments ubiquitous. Presently, their team is starting with the development of a consumer-friendly digital wallet called Aryl. This app has a unique Volatility Shield feature which enables the instant conversion of cryptocurrency to fiat currency. The Volatility Shield can protect consumer funds from the rapid price-fluctuations in the crypto-markets.
Rubius Inc. plans to integrate the Aryl wallet with already existing POS terminals. Therefore, an Argentine shopper with Aryl could purchase groceries in Pesos. Aryl could let the shopper convert his or her Bitcoins or RUBYs into Pesos directly at the cash register, by utilizing the Volatility Shield feature.
By keeping her money in Rubius (RUBY), the shopper could protect her savings from Argentina’s 25.4% inflation. The Volatility Shield and RUBYs would give the shopper far more buying power compared to the Peso, which has a dismal exchange rate.
Naturally, Aryl could help average people survival currency crises. There might soon be a huge market for such solutions. Several nations including Brazil, Indonesia, India, and South Africa are facing textbook currency crises, Satyajit Das warned at Bloomberg.
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