Central American country El Salvador has officially become the primary country to adopt Bitcoin as a tender . The country will accept flagship cryptocurrency Bitcoin alongside its official currency – the us dollar. this suggests that Bitcoin will now be accepted as a satisfactory payment for any monetary debt.
In June 2021, the Central American country announced that it might be introducing Bitcoin into its mainstream financial system . during a video broadcast, El Salvador’s President – President Nayib Bukele, announced that El Salvador was partnering with Strike, a digital wallet company, to create the country’s modern financial infrastructure using blockchain technology.
This announcement has been met with different reactions from global experts, all of which have expressed concern about the potential outcome of the choice , most of which are sceptical about the move and believe that cryptocurrency is just too unstable and too risky to be used as mainstream tender.
The risks outlined by some economic experts have even prompted several El Salvador citizens to require to the streets in protest against the adoption of Bitcoin as a politician currency. the planet Bank also warned against the move, while some analysts have described it as an “attention-seeking move” from an “authoritative regime”.
Amid global criticism and scepticism, Nigel Green, the Chief Executive and founding father of deVere Group, a financial services giant, has described El Salvador’s move as ground-breaking in terms of greater adoption of Bitcoin. “El Salvador is making history with a bold jump into the longer term of cash by officially recognizing Bitcoin as tender along side the US dollar,” he said.
According to him, El Salvador’s reliance on the U.S dollar to finish transactions comes with its own set of, often very costly, problems. one among which is that the El Salvadoran government cannot print its own money and therefore the economy cannot enjoy the U.S. Federal Reserve’s money-printing agenda. Therefore, El Salvador must either borrow or earn the dollar it needs.
He explained that countries that adopt cryptocurrency as a tender have a currency that isn’t influenced by market conditions within their economy, nor directly from only one other country’s economy, and said that El Salvador’s adoption of Bitcoin could cut the value of remittances, a serious source of income for many people.
Nigel Green added that by diversifying the nation’s dollar reserves into Bitcoin, there might be additional opportunities for El Salvador to extend the dimensions of its reserves; the country may benefit from significant investment and capital inflows as digital asset organizations are likely to relocate to the Bitcoin-friendly state.
Should El Salvador’s adoption of Bitcoin as a tender convince be a hit , it’ll likely end in other countries’ adoption of cryptocurrencies. “Due to their similar reliance on remittances, amongst other factors, other nations, including Panama, Guatemala, and Honduras, could also adopt Bitcoin should the method in El Salvador run smoothly and there’s greater economic process , stability, and levels of monetary inclusion as a result,” Nigel Green said.
The move has attracted global attention to the state , with many nations wanting to see the result of El Salvador’s decision because it seemingly takes the lead within the evolution of digital currency.