Alex Gladstein’s latest talk at Bitcoin2023 in Miami sparked a spirited debate within the cryptocurrency community on Reddit. The discussion, which revolved around the International Monetary Fund (IMF) and its lending practices, drew mixed reviews. Critics questioned Gladstein’s assertions, citing a lack of concrete evidence and specific examples of predatory loan terms used by the IMF. Some users also found the talk disjointed and argued that Gladstein’s argument was more cogently articulated in his other works and in his book.

However, Gladstein’s talk also had its supporters. They acknowledged his previous successful endeavours to shed light on the darker side of IMF loans, particularly how they can enable dictators to enforce austerity without fear of democratic rejection. Despite this, even his supporters conceded that these important points were not as effectively conveyed in this particular talk.

The discussion took a timely turn towards El Salvador’s controversial move to legalize Bitcoin as an official currency. El Salvador’s decision has been met with scepticism from the IMF, expressing concerns about the potential global financial contagion. President Nayib Bukele, undeterred by the IMF’s warnings about being shut out of credit markets, maintains that this radical currency policy will facilitate remittances from overseas workers.

The IMF, however, has warned El Salvador about the risks associated with Bitcoin, including its impact on financial stability and integrity, consumer protection, and fiscal liabilities. It has even advised El Salvador to revoke Bitcoin’s legal tender status. Despite the IMF’s warnings, cryptocurrencies have found favour in countries like El Salvador, where they allow citizens to avoid currency devaluation and limits on currency export.

In his talk, Gladstein delved into the concept of “debt colonialism,” a system that he argues enables richer nations to exploit poorer ones by trapping them in a cycle of unpayable debt. He explained how Structural Adjustment Programs (SAPs) from institutions like the IMF often lead to economic hardships for the citizens of these countries. He discussed the concept of “double loans” and the use of “the colonial franc,” underscoring how this system allows richer countries to extract resources from poorer ones, benefiting from cheap labour, resources, and interest payments.

Gladstein also highlighted the increasing debt-to-GDP ratio in developing economies, discussing how other powers, such as China, are trying to emulate this system. He invoked the case of Thomas Sankara, the former leader of Burkina Faso, who was assassinated for advocating against the repayment of colonial debts. Gladstein acknowledged the role of certain Western values in economic success but noted that this success has been facilitated by labour and resource extraction from other countries.

Despite the sombre tone, Gladstein ended on a hopeful note, lauding the potential of cryptocurrencies like Bitcoin. He suggested that a neutral, global currency like Bitcoin could potentially lead to a more equitable global economy. Gladstein concluded by promoting his book “Hidden Repression” and encouraging active participation in Bitcoin economies in developing countries.