Quote (ofthevoid @ Sep 17 2024 12:32pm)
Pegging is typically done to stable currencies only though. Like the USD, Euro, Swiss Franc, etc. It cedes control of monetary policy to that countries central bank so when the US fed decides to cut rates, which devalues the dollars, your 3rd world country currency also gets devalued.
Personally, IMO if i was chief economist in some of these places, and wanted currency stability, that's the way I'd run the country. This makes you much less flexible to address economic concerns though. So like if there's a recession and you want to expand the monetary supply, you may have to break that peg. But again comparing it to BTC, I'd 100% chose to peg to dollar than completely switch to BTC.
As you said in the scenario where you choose the dollar, you are increasingly dependent on US foreign policy and politics. Btc is at least 1 layer removed from that level of control, even if the US strongly overall dictates the direction of btc anyway.
Additionally even more zoomed out, pegging to the USD remains a risk until the US debt answer becomes clearer. Decades have past sure but whether it’s our generation, or our children’s, the bill comes do