The End Of The Big Mac Index

By Steve Hodl | My Path To Fire | 10 Mar 2022

The Big Mac index, originally published by The Economist, is an index used by many people to measure purchasing price parity within different countries. It works as a check against the actual exchange rate used and you can then see how wide the difference is and compare it to different countries.

A typical Big Mac index

A typical Big Mac index


This is because there is a McDonald's in every country in the world. Up until now.  Bloomberg reports that Mcdonald's will close their 850 branches in Russia after originally deciding to stay open.  This will then cause a gap in the famous Big Mac index.  In the latest Big Mac Index, the Russian Big Mac was at the bottom of the table, a whopping 70% undervalued.



This does not even reflect the current FX movements in the rouble since January! There has been a huge depreciation of the rouble against the Fiat US Dollar. 


How has the Big Mac Index faired against Bitcoin? Well the Fiat US Dollar looks more like the rouble on steroids now! Look at the purchasing power lost if you held Fiat US Dollar against Bitcoin!



A Big Mac is getting cheaper in Bitcoin

In the future, we may need a Big Mac Crypto index. We could use it as a rough gauge about Crypto exchange rates and the purchasing power parity (PPP) between countries.  It would be interesting to know if there are pricing disparities between Crypto rates and the price of a big mac in the future. The volatility in Crypto could send the price of a big mac skyrocketing one day and costing very cheap the next. So most likely they will use a 2nd layer Crypto as money that is more stable for everyday use.  Perhaps BitcoinCash or a stable coin? It's going to be an exciting time seeing them get adopted.

This may be coming sooner than we think, as this week the Central Bank of the Phillippines has gone live with CBDCs and the network is growing. The US and EU have announced their digital dollar and euros respectively.

As a pre-cursor to the implementation, the testing of switching off fiat payment systems like Visa and Mastercard is in progress. Will Visa and Mastercard be the system used with which to transmit CBDCs? They have the most advanced and developed payment systems worldwide. On their website, they claim to connect consumers, businesses, banks and governments in more than 200 countries and territories worldwide. This allows people to use "digital currency" instead of cash and cheques.

And with over 3.8 billion Visa cardholders worldwide, they are in the best place to operate the new CBDC consumer system. In their annual report, they allude that their goal is "to provide access to the global economy, for everyone, everywhere". This now means except in Russia. However, in their strategy, they want to become the single connection point for the payments ecosystem. Will they be the only On-Off bridge to CBDCs?


In their strategy, it is also their goal to move the remaining cash spending to cards and digital accounts. How do they plan to do this? It shows above that Cryptocurrency and Tokenisation are part of that plan. Visa is most likely going to be involved with the CBDCs on a banking and consumer level. It is still to be confirmed how many layers of CBDCs there will be, but it is being ironed out as we speak.

With the recent threats to ban crypto for "environmental" reasons in the EU and the recent announcement for crypto regulation in the US, this could be the starting gun for future CBDC implementation. The importance of private crypto has never been so crucial.

Thanks for reading.


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Steve Hodl
Steve Hodl

A crypto Hodler playing with FIRE

My Path To Fire
My Path To Fire

A crypto hodler playing with FIRE

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