The Financial Revolution: How Many Millions Will Break the Chains of Perpetual Poverty?

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The Financial Revolution: How Many Millions Will Break the Chains of Perpetual Poverty?

By Trassos Vidalous
August 7th, 2018

Latin America shares more than a continent. Common themes include federalist and centralist governments supported by military oversight, systems rife with political corruption. Economic uncertainty, with looming resultant insolvency and exorbitant interest rates—the ever-present specter of inflation—threaten the fragile social systems dominated by these trends.


However, the people resist. Among the paralyzing bureaucracy and financial influence of corporate agents who strive to stifle social progress for personal gain, the longing to regain control of local political power and restore sober economic rule persists. This call to action has led to the development of social currencies as a mechanism to restore social order. Multiple countries in Latin America are implementing these strategies with remarkable success.


In Brazil, there are already over a hundred social currencies in circulation, subsequently empowering communities that were previously deprived of traditional support through banking and accounting for values in the tens of millions of BRL, offering tangible results that are not auditable by traditional means. A prime example is the coin minted in São Miguel do Gostoso, where each note is inscribed with the following disclaimer:


"It is totally forbidden to exchange or negotiate this social currency for cash. It can only be used as a means of subsidy in the purchase of goods, for services, commerce, or to deal with people in agreements with Solidarity Bank Gostoso.”


By creating this currency through the exercise of local governmental power, Brazilians are beginning to reclaim their autonomy and capacity for political organization. Through the voluntary use of the gostoso to create an economic zone, informal agreements and meaningful social interactions are generated. While the value of this currency may be difficult to define according to traditional monetary systems, informality is practically a cultural norm in the country, where nearly 38 million Brazilians work on the margins of the law. Yet Brazil is not alone in this budding economic practice. Multiple communities have created local currencies throughout Latin America, commonly referred to as monedas comunales, attempting to develop a new narrative of civilian empowerment in governance.


Recently, Venezuela has been seen as a stage of humanitarian crisis accompanied by hyperinflation. Communities have resorted to these solutions and there are already more than ten social currencies in circulation, the foremost known as the panale. It's important to note many of these were created by the very same socialist government hidden in militancy, and is the trademark of socialist regimes which tends to survive within the black market.


In Argentina, the perpetual monetary crisis has caused many to chose to use the US dollar in their business for lack of better solutions. In Uruguay, there is the e-peso, aiming to digitize their paper money more efficiently. However, these strategies are not optimal when viewed through the lens of self-empowerment and prosperity at the local level.


Therefore, the first wave of widespread community cryptocurrencies is inevitable. Skeptics tout the risks and uncertainties associated with these investments, but as Brazil has demonstrated through the implementation of the gostoso, these fledgling economic endeavors have already demonstrated their efficacy. Brazilians invest in criptomoedas at a rate more than twice what they invest in the stock market journal, a trend that will continue to grow as these systems offer needed growth and stability.