El Salvador has officially adopted bitcoin as a legal tender. In this article, we will discuss, "Why Is the Salvadoran President Adopting Bitcoin? Will Other Countries Follow Suit?" Let's get started.
Why Is the Salvadoran President Adopting Bitcoin?
El Salvador's President Nayib Bukele hopes bitcoin will overcome some of the country's most difficult economic issues: 70% of the population lacks a bank account, and citizens sending money home from abroad contribute up to a fifth of the GDP. However, they must pay high transaction fees. Bitcoin eliminates the need for banks and enables quick, cheap international transactions.
Every Salvadoran has received $30 in bitcoin (the US dollar is the other accepted form of payment in the country), which they can use to make purchases or pay taxes. Businesses are required by law to accept it, although they are free to immediately convert all received bitcoin to dollars. A congressman from Panama has now put out legislation that would allow his country to follow El Salvador's example.
Will Other Countries Follow Suit?
Simply put, no. Any large economy backing a cryptocurrency like bitcoin, which cannot be regulated by a central bank and was developed by a covert cryptographer, is highly unlikely.
However, it's likely that central banks from all over the world will introduce their own digital currencies that combine the advantages of cryptocurrencies and traditional money. Research on these so-called Central Bank Digital Currencies was released earlier this year by the financial conciliation. Although not all CBDCs will be cryptocurrencies, the research stated that 60 governments are currently developing one and that 88% of them are based on blockchain technology, the technology behind bitcoin.
Why Is the Salvadoran President Adopting Bitcoin? Will Other Countries Follow Suit? - Hopefully, this article can help you to get some knowledge.
