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On March 20th, the venture capitalist, Bitcoin enthusiast, and entrepreneur Tim Draper met with Mauricio Marci, the Argentinian President to discuss ways to improve the country’s economy.
Draper advised the President to transform the country to attract entrepreneurs because otherwise, the economic situation will result in brain drain. Brain drain is when highly skilled or qualified people emigrate from a country due to bleak economic prospects or other factors.
Argentina experienced a growth of 2.9 percent in its economy in 2017, but by the second quarter of 2018, the economy slumped, plunging the Argentinian peso. The Argentinian peso fell around 100 percent against the USD which then caused accelerated inflation. Argentina is currently experiencing a recession and it’s expected that the country will only start to recover in 2020. With economic depression and uncertainty, Draper is looking for inventive new ways to boost the economy.
“We talked about Bitcoin and the devaluation of the peso, and I proposed a bet: if the peso was valued more than Bitcoin, I double the investment I am making in the country, and if Bitcoin acquires more value than the peso, that would be a perfect solution because there is no confidence in the currency.”
Draper argued that now is a great time for entrepreneurs in Argentina and that it’s time for the “heroes to emerge” out of the crisis. Draper is arguing that by making Bitcoin legal tender in the country, it will attract entrepreneurs to Argentina to start and grow their businesses.
Draper hasn’t stopped his recommendations at Bitcoin, he also proposes that the country upgrade to 5G. This would be a significant infrastructure project, but he argues it would attract big companies that will “build the nation’s technology infrastructure and roads.”
In a somewhat dramatic statement Draper added:
“I think it’s time to attract entrepreneurs and venture capital, so we will create progress because, otherwise, the country will continue on this bureaucratic path that lets the status quo continue and will bring everything to collapse, and we do not want that.”
As Draper also mentions in his speech, other countries have recognized Bitcoin as legal tender in the past with success, giving some weight to the idea. In April of 2017, Japan passed a law recognizing Bitcoin as legal tender.
It will be interesting to see whether President Mauricio Marci implements the somewhat radical ideas proposed by Draper.