This is an editorial opinion by Michael Markle, a member of the San Juan BitDevs meeting.
Puerto Rico has seen it all, from currency devaluation, wealth confiscation, natural disasters, colonists and struggles for independence, all in less than 100 years. Before that, Pedro Albizu Campos fought for Puerto Rico to have its own identity, independence and sovereignty.
But now the world has decentralized money that can provide Puerto Rico the independence and identity it has been hungry for and deserves.
Yauco, Puerto Rico
History Of Currency In Puerto Rico
In 1889, Puerto Rico experienced a 40% currency devaluation, crippling Puerto Rico’s economy. This was caused by the United States setting up the Colonial Bank of America and declaring the US dollar the legal tender (official money) of Puerto Rico, replacing the peso.
American Colonial Bank in Old San Juan.
However, in 1899, one peso was only worth 60 cents, meaning Puerto Rico’s local businesses and citizens lost 40% of their net worth overnight for reasons beyond their control. This caused Puerto Ricans, trying to save their net worth, to borrow money from the American Colonial Bank. However, high interest rates make it impossible for locals to repay their loans, leaving many Puerto Ricans unable to pay their debts. As a result, the bank seizes their assets (in these days, usually their land).
Response From the Central Bank of the United States in 2020
This chart shows all the dollars in the US economy and Puerto Rico. Source: M2 (M2SL), FRED, St. Louis Fed (stlouisfed.org).
Puerto Rico uses the US dollar as legal tender and is vulnerable to the consequences of reckless monetary policies, including the expansion of this currency (inflation), and has experienced devaluation of the main currency (as mentioned 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 in the economy, flooding the market with dollars. Printing money has devastating consequences for local economies, especially for low- and middle-income families. Printing money leads to a wider wealth gap with goods and services becoming more expensive. Home prices and food prices in Puerto Rico are rising rapidly.
Boqueron, Puerto Rico
The legacy of Peter Albizu Fields
Who is Pedro Albizu Campos? People who value human freedom, right to privacy, self-sovereignty, independence and prosperity.
He grew up in the Machuelo Abajo section of Ponce, Puerto Rico. With an exceptional education, Campos graduated from the highest-ranking school in the United States and speaks six languages. He is a person who leads by example, shows up every day to lead, instilled values, dreams big and provides inclusiveness regardless of class or status. He is a true human being, who knows the strength of others, knows that he does not need to depend on others.
During that time, his main focus was the freedom and independence of Puerto Rico. A deep understanding of Puerto Rico’s history is important to understand why they chose this focus. If Alibuzu Campos were alive today, he would be a Bitcoiner. I encourage everyone to read “The War Against All Puerto Ricans” by Nelson A. Denis for the full story.
Albizu Campos talks to sugarcane workers
“Albizu also used his legal skills to create a series of bonds registered on Wall Street. These bonds were investments in the Republic of Puerto Rico, redeemable from the island’s treasury when it became independent. The first bond offering was $200,000 with increments of $10, $50 and $100.
Albizu Campos spoke at the University of Puerto Rico in Rio Piedras
Albizu Campos at Sixto Escobar Stadium
Banking The Unbanked
Puerto Rico has about 3.2 million residents and many of them are estimated to have 36% of the population who are unbanked.
Photo credit: Javi Cintron
When individuals do not have access to proper banking or financial services, the implications are devastating. Bitcoin not only allows anyone to open a bank account, it allows anyone to be their own banker.
Why Bitcoin?
Source
Bitcoin is:
- Decentralization: Bitcoin is the first form of money in the history of human existence that is not controlled by individuals, companies or governments.
- Open: Bitcoin allows anyone to participate in the network. It does not recognize race, border, religion or cultural identity. At a deeper level, it does not understand humanity or age.
- Without permission: Bitcoin does not require permission from the government or third parties to store or transact value, meaning that the only participants in a financial transaction are the sender and the receiver. No banks, PayPal, Venmos, ATH Móvil, etc. You do not need permission to open a savings account.
- Inalienable: With Bitcoin, your wealth is protected for generations to come. This can be done with an encrypted key (password) that only you know. It cannot be frozen, seized or stolen from you. If you die without a contingency plan, your bitcoins die with you and cannot be used.
- transparent: The Bitcoin transaction ledger is available to anyone at any time. Currency issuance is known and cannot be changed. The Bitcoin network audits the ledger every 10 minutes to ensure all participants are operating within network rules.
- Absolute Disadvantages: Bitcoin has absolute disadvantages. Only 21 million bitcoins will exist. Bitcoin cannot be imitated, duplicated, counterfeited or double used. Bitcoin is the perfect unit of account.
- Future Growth: Bitcoin allows Puerto Ricans to become sovereign individuals. Bitcoin separates money from the power of the State, as critical as the separation of church from government in the 18th century, which led to the great enlightenment. We cannot rely on a belief system in individuals, institutions or governments to control our financial destiny. Bitcoin is not trusted – verify everything.
Love For Puerto Rico
My inspiration for writing this piece is not only being a bitcoiner but from a Puerto Rican local. I love the community, the community and the values that are instilled in this island.
Puerto Rico offers the decree of Act 60 to businesses and individuals who can move from the United States to the island and establish a business there, which allows them to pay no capital tax and only 4% income tax while spending 51% of the time in Puerto Rico.
Now, to be clear, Act 60 provides tremendous value to Puerto Rico and should be embraced. However, on the contrary, Law 60 also gives an open invitation to bad actors and scammers who can walk away from scams in the form of failed projects/businesses without tax implications. During the crypto bull market 2021, I saw personally that Puerto Rico became a cesspool of individuals who launched cryptocurrency projects and marketed questionable financial innovations to investors every day, only to walk away from the project with a large amount of investors’ money, burning people who invest with funds earned from real work that provide real benefits to the world. There are countless examples of this, which provide context and make it understandable why many locals harbor resentment towards cryptocurrency.
Bitcoin is not crypto, Bitcoin is not a Ponzi scheme, Bitcoin is not an individual or company, Bitcoin is not a beneficiary of Act 60, Bitcoin is not colonialism, Bitcoin is not planted by the government. Bitcoin is money, Bitcoin is freedom, Bitcoin is freedom, Bitcoin allows every Puerto Rican to have the individual prosperity that many locals have defended and died for.
Bitcoin is Puerto Rico’s chance to have an independent identity while allowing its citizens to be 100% sovereign. Adapting the bitcoin standard would provide huge benefits to places like Puerto Rico. Learn what bitcoin is, teach others, become an individual ruler and start building the Puerto Rico your ancestors envisioned.
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This is a guest post by Michael Markle. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.