Saying things are financially unstable in Puerto Rico would be quite the understatement right now. The country’s Governor announced how Puerto Rico will be defaulting on Monday, causing even more stress on a very fragile global economy.
The Puerto Rico Default and Bitcoin
A lot of countries around the world are struggling to repay their debts right now, and Puerto Rico will be the next region on the chopping block. But people should not get their hopes up by any means, as the country’s Governor has predicted a default on their debts on Monday, which will only hurt the local economy even further.
Keeping in mind how the Puerto Rico Government Development Bank owes its creditors a whopping US$422m on Monday, it seems impossible for them to cobble the money together. It is not the first time the country is on the brink of a default, though, and other Caribbean countries will follow shortly at this rate.
That should come as no surprise either when knowing how there is a total debt of US$70bn across the Caribbean region and a 45% poverty rate among a shrinking population. Additionally, there is no indication this situation will improve in the coming months or years as a restructuring is needed.
Without the necessary cash to make this repayment deal happen, things are looking very bleak for Puerto Rico. Moreover, there are grave concerns over the liquidity sources for the local public agencies. If the default were to happen, the entire island would effectively come to a standstill
Keeping in mind how Paypal has already shut down their service in the country in September of 2015, moving funds in and out of the country will become even more difficult. Bitcoin would be a likely candidate to take the place of the legacy system, especially in a region where solutions are direly needed.
Source: Fortune
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