The Fink Factor

Introduction

Larry Fink’s tortuous orange pill journey has been well documented. From his ‘index of money laundering’ quote back in 2017, to his grudging acceptance, through to the ‘Fink Pump’ of 2023, as BlackRock’s ETF application was announced.

But the above quote illustrates that even today – after his clients have invested more than USD3 billion in his spot Bitcoin product - he still views Bitcoin through a decidedly ‘global north’ lens.

North vs South – the Dichotomy of Adoption

Podcaster Anita Posch has done more than most to highlight the north / south dichotomy that has - until recently - existed in terms of adoption.

While the global north has been focused on store of value, in Africa, South America and other developing regions, economic reality means that few have the luxury of stacking sats.

I was fortunate enough to spend time in Zimbabwe recently, and my experience there opened my eyes to this north / south divide, but also the exciting momentum that is building around the world in terms of Bitcoin’s use as a medium of exchange.

The limits of dollarisation

Zimbabwe has been dollarised since 2009, when the local currency collapsed after a period of hyper-inflation.

Zimbabwe is a reminder that money is an ‘emergent’ phenomenon. The dollar simply ‘emerged’ over the course of a matter of months because the population needed a better form of monetary media than their government was able to offer them.

However – as I recently found out – the economics of ‘importing’ dollar notes does not extend to coinage.

In a supermarket in downtown Harare I purchased a few items which totalled USD9.70

What then ensued can only be described as a fiat farce.

In the absence of coinage, I had to negotiate with the store clerk as to what item I could purchase to make up the 30c.

After much back and forth, we settled on a single banana.

The whole process took about 5 minutes, and involved more than a dozen people (including my two sons and the mother-in-law, as well as the customers behind me in the queue).

All of whose time was stolen by a broken fiat system.

Bitcoin to the rescue

Ironically had my wife hailed from South Africa this particular article might never have been written.

Because in South Africa one of the largest supermarket chains – PicknPay – already accepts Lightning payments throughout its 2,000 store chain.

But it is not just supermarkets that are jumping on the BTC rocket ship.

Perhaps inspired by their new libertarian leader, Argentinians have begun signing rental agreements denominated in Bitcoin.

And even here in Victoria a well-known café on the Mornington Peninsula – 2 Left Sisters – recently began accepting Lightning payments.

Commenting on their decision, sisters Nerida and Tahlia had this to say: “As part of our commitment to our customers we made the decision to absorb the fees on cashless transactions, which in our case run into many thousands of dollars each year. On top of that we have seen significant inflation across the board in terms of our input costs.

In that context moving our business to a Bitcoin standard makes perfect sense, and we look forward to welcoming more and more Bitcoiners to our café, while spreading the message about the benefits of sound money to all Victorians.”

(In our next Newsletter we will discuss the innovations that are occurring in point-of-sale and accounting systems to reduce the burden associated with running a dual-currency business through this transition).

Conclusion

It is surprising that Larry Fink would continue to pass value judgements about Bitcoin, given how many times he has been proven wrong in the past.

Perhaps he needs to come down from his ivory tower and meet the individuals and businesses around the world that are driving the bottom-up adoption of Bitcoin and Lightning as their preferred currency.

This is the first in what is intended to be a regular column analysing Bitcoin trends from an Australian-perspective. Feedback and ideas for subsequent articles can be sent to editor@vbtc.org.au