Two Paths Ahead for Colombia’s President-Elect: Bitcoin or Altcoin?

By Landon Manning

Gustavo Petro, guerrilla, economist, politician and winner of Colombia’s most recent presidential election in a minor upset, has campaigned on a platform of furthering his country’s economic independence from the United States, making his gamut of pro-Bitcoin statements turn into a real opportunity for the nation.

Petro’s career has been a dramatically shifting one, with a consistent track record of fighting for progressive causes. As a teenager, he was involved in the M-19 guerrilla movement (most famous for stealing the sword of Simón Bolívar), before deciding to pursue peaceful methods and a Ph.D. in economics. After this, Petro entered a career in politics and helped broker the peace treaty between the last guerrilla holdouts, before finally winning a close election to become Colombia’s new president-elect in June 2022.

The question, however, is what exactly this has to do with Bitcoin (BTC)? Petro has repeatedly claimed to be seeking a new economic path for his country that connects with the radically decentralized promise of Bitcoin, and he has also made pro-Bitcoin comments for years. Although he has not made Bitcoin an outward feature of his political brand, his first comments on the subject stretch all the way back to 2017, calling it “a community currency that is based on the trust of those who transact with it, as it is based on a blockchain, trust is measured and grows, hence its strength.” This is well before most politicians, anywhere, had jumped on the bandwagon and his support has been consistent ever since.

Even as recently as 2021, in response to a plan from El Salvador to produce bitcoin from green energy, Petro tweeted his support, wondering what kind of economic transformation could take place if Colombia spent all the electricity used in the cocaine business to start mining bitcoin. That’s what Petro is really after for his country: a chance to modernize the country, to “overcome feudalism in Colombia, to overcome the hereditary mentality linked to this world of serfs.” This plan to develop a new economy would break with the stranglehold that Western financial institutions have on the country, and they know it: just look at the hysteric tone that they treat him with.

However, this past support is far from a concrete plan, and it shows how two paths open for a pro-Bitcoin government to try and gain more economic power. Petro himself has praised the initiative of Bukele in El Salvador, breaking with the dollar to introduce bitcoin as a new legal currency. Despite a great deal of bad press and trouble in the markets, El Salvador has been doubling down, buying bitcoin at a price that had already risen by $3,000 by the time of this article’s writing. Unbowed by potential troubles, El Salvador is ready to weather the storm.

On the other hand, there is the case of the Central African Republic (CAR). Although the government had made a lot of press about adopting bitcoin in the same style as El Salvador, even hiring a firm to assess potential difficulties in the bitcoin rollout, a bombshell announcement came in early July when the country’s leader Faustin-Archange Touadéra announced the official adoption of “Sango Coin,” a wholly new cryptocurrency that will have all the difficulties of getting an internet-shy population to use it and none of the benefits of bitcoin with its decentralized and immutable ledger. Touadéra claimed that “Sango Coin will be the currency of the new generation of the Central African Republic,” saying that this new coin will be backed by bitcoin itself. Those familiar with the recent crashes in stablecoins around the world should be aware of how “stable” backing like this really is. In other words, although bitcoin is still legal tender on paper, it looks like the CAR government’s resources are being pivoted to adopt this entirely new Sango Coin, and the benefit seems totally unclear.

In other words, these seem to be two options open to Colombia moving forward, if Petro wishes to turn to a new economic system to enact his new economic policy. It’s a hard road to escape the Washington Consensus when it comes to real change in developing countries, and turning to cryptocurrency without truly embracing bitcoin seems like political and economic suicide. However, with Petro dreaming big and looking to bitcoin for many years, it seems like Colombia’s bright future may be just over the horizon.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.