Bitcoin is evolving as a prominent asset in financial institutions. The probability of Bitcoin users is high in range and the trend of BTC has hit differently overcoming many challenges. The Bank of America has come up with the idea of adopting Bitcoin as legal tender in El Salvador as the authorities see potential benefits.
The bank analysts outline four potential benefits for adopting Bitcoin as legal tender. This decision could simplify remittances, promote financial digitization, give consumers more options, and greater investments from American firms and digital currency miners.
According to analysts, including Latin American strategist Claudio Irigoyen, the idea of BTC adoption has been negative on the whole. As these benefits are unsure, the analysts are dismissing any argument in favor. The reports described:
“When compared to traditional remittance channels, using Bitcoin for remittances could potentially reduce transaction costs. The idea is that Bitcoin could be used as an intermediary for cross-border transfers, with dollars converted to Bitcoin by the sender and then converted back to dollars by the receiver domestically.”
Significantly, if conversions with BTC and dollars are implemented then bitcoin’s volatility would be reduced. Transaction fees will become less for financial intermediaries which allow users to receive more disposable income. Bank of America, on the other hand, states that “it is unclear how bitcoin transaction fees would compare to traditional remittance channels.”
El Salvador – First Nation To Adopt BTC as Legal Tender
El Salvador is the first state to accept Bitcoin as legal tender. This marks a significant moment for the cryptocurrency market evolving from nothing to mainstream. Additionally, centralizing access to electronic payments via BTC would be dynamic and more beneficial as 70% of adults in the state have no bank accounts.
Moreover, those who adopt BTC as legal tender can make transactions using the government’s electronic wallet, Chivo. Although, the analysts are unsure about the benefits and idea of adopting Bitcoin as legal tender receives a negative impact. However, no other country has followed El Salvador’s path until now.
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