How monetary skepticism led to cryptocurrency adoption in Czechia.
Josef Tetek, SatoshiLabs' economist, says that seven currencies have existed in Czechia since the 19th Century.
Czechia is a Central European country with 10.7 million inhabitants. It is well-known for its beautiful capital Prague, rich history, and delicious beer. However, cryptocurrency adoption has been added to this list in the past decade. The Trezor wallet was the first cryptocurrency wallet to be created in the world in 2014. It is still in use today. SatoshiLabs, the parent company of the Trezor wallet, has expanded to create secure chips for electronic hardware via Tropic square and advance cryptocurrency education via Invity.
Braiins (Slush Pool) was also established in the country, which has seen close to 1.3million BTC being mined since 2010. General Bytes is another of the largest crypto ATM chains in the world, with over 8,000 machines. Alza, the nation's largest e-commerce retailer accepts BTC and has been writing deep dive articles about Bitcoin and technology for the past year.
What is it that drove this tiny nation of 10.7 millions people to become a prominent player in the crypto world? Josef Tetek is SatoshiLabs' chief economist. He discusses the phenomenon in detail in an exclusive interview with Cointelegraph. Tetek is also the Trezor wallet's brand ambassador and writes for Bitcoin Magazine. He holds a Master's degree (or equivalent) in economic policy at the Prague University of Economics and Business. Here is what he had a to say.
"For the past 140 years, seven currencies have been in circulation in the Czech Republic. First there was one that was backed by gold, then two silver coins (during the Austria-Hungarian Empire rule). The Czechoslovak Koruna [crown] was gold-standard after the country's independence in 1918.
Czechoslovakia, during the interwar period, was an industrial powerhouse, led by Skoda Works. This conglomerate made everything from cars and tramways to aircraft and military equipment. It is also the only Central European country to have a parliamentary democracy since 1933.
The 1938 Munich Betrayal, where Britain and France silently gave their consent for Germany to annexe the heavily fortified and industrialized regions of Czechoslovakia, quickly eroded faith in the Czechoslovak currency and the country as a whole. It quickly became a puppet country for the German war machine as it was unable to build natural defenses against it. This led to another currency change.
However, the Czechoslovak Koruna was not reestablished. The Iron Curtain grew from the Baltics to Black Sea immediately after the Allies won World War II in 1945. After three years, the newly independent Czechoslovak Third Republic was made a satellite state by the Soviet Union with a new Soviet-controlled currency.
Stalinism was furthered by the Czechoslovak Communist Party's 1953 devaluation of all personal savings in koruna, at a ratio 50:1. Tetek said to Cointelegraph:
"Many people remember it [the 1953 incident] still to this day. This includes our grandparents and parents. It was basically large-scale theft by the state.
In 1989, the Velvet Revolution toppled Communist Party and created the fifth Czechoslovak Republic. However, the independence did not restore faith and belief in the new koruna at first. It was also not helpful that Slovakia had left the EU in 1993. Inflation was almost constant at 10% in the country in the 1990s.
Tetek summarizes the reasons why the Czech people are attracted to cryptocurrency, particularly their decentralized nature.
"There was a currency change in Czechia for every generation. We are skeptical about the official monetary system. The combination of high-quality technical education and a large number of people who have received high-quality training in crypto enabled Czechia to adopt it.