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Over the past ten years, Mexico’s public debt has spiked from 106 billion USD in 2007 to more than 530 billion USD in 2017. By the end of 2017, public debt was more than 46% of Gross Domestic Product (GDP) with a per capita debt of approximately 4,000 USD, recent data confirms.
Mexico’s high debt ratio has even caught the attention of the International Monetary Fund (IMF). Last April, Abdelhak Senhadji, Deputy Director of the IMF’s Fiscal Affairs Department, recommended that Mexico work to lower its debt.
Some debt by way of strategic investment in infrastructure, health, and education is reasonable. However, Mexico has not experienced any national growth in spite of its debt. As such, conflict occurs when debt increases and there is no policy in place to keep state finances in check.
To add to this, the Mexican government experienced a change in leadership. Mexico’s new President, Andres Manuel Lopez Obrador holds very different views on the allocation of government funds as compared to his predecessor, Enrique Peña Nieto.
Bitcoin as a valuable safeguard
With no direct influence on policy decisions, Mexican citizens are powerless at the hands of their leaders. Public debt and currency devaluation have consistently lowered standards of living for the Mexican people. However, cryptocurrency like bitcoin can offer a unique advantage to Mexicans and citizens around the world in similar economic environments.
Bitcoin’s decentralized nature makes it is free from public policy and political influence. Additionally, the fixed supply of bitcoin prevents against hyperinflation ensuring that it can sustain its purchasing power over the long term. Global reach with fixed transaction fees means that it can be used by anyone, anywhere at any time.
As a disruptive technology, Bitcoin offers a life raft to those whose native currency holds increasingly negligible value.