Of late, El Salvador, a small country in Central America, has gained good popularity. The reasons are apparent, and it becomes the first state to adopt bitcoin as its legal tender. Yes, you heard it right. The country has entered into the stage of drafting proper legislation for Bitcoin. It has impressed other nations in Central America and other places as well, including Panama. However, the nations like the US, UK, and China are not planning to investigate the matter as to how these countries can launch their digital currency. It is interesting to know how Bitcoin has entered into this nation, now becoming the legal tender. Let’s check the same in the following paragraphs, while you can even explore the Bitcoin trading platform app of the Crypto trader website.
Why has El Salvador adopted the BTC?
It is a big question to answer. As per Nayib Bukele, the said state president, Bitcoin will help his country remove the economic crisis. It will help people to get the power of sending money home from abroad. People sending back money to their nations has given a good shape to their countries’ GDP. However, these have to pay higher transaction costs. As per reports, 70% of people do not have proper bank accounts. However, with Bitcoin, they are empowered. They can spend their money in a much more affordable and straightforward way without worrying about the banks’ cross-border transaction fees. Every citizen of the nation was given 30 USD in the BTC, which can help them pay their taxes or even shop. Companies are now going to accept bitcoin to sell their products and services. The law in the draft by the nations will accommodate how companies have to accept payment in the BTC. Once they receive money in the BTC, they can swap in dollars. Now, we see the congressman from Panama coming forward to demand proposed legislation, which can see the nation following the footsteps of El Salvador.
Now, the big question is, will this format work? The experts feel that there will be issues in this format as the BTC’s usage is strict. We saw many people from the country sharing their shopping experiences using BTC, while others marched ahead in the street in agitation. We see the market getting spooked. If you check the reports of FT, the country is coming up with long-term bonds. The sale has witnessed moderate growth so far ever since the government has announced the same. It means that the trust in the country’s economy remains regulated. Bitcoin being volatile, may have issues that can question using it as a legal tender in the country. The companies accepting Bitcoin as a payment option may one fine day realize that the value of the BTC has gone down when they intend to roll their money.
So, with these issues, will other nations also follow the same path? It is a tricky question to pose, which has a negative answer. Thus it is more likely to see that any powerful nation would support Bitcoin and other digital currency as a legal tender. Secondly, they also face the issue that Bitcoin remains autonomous and banks have no control over them. It was developed by some unknown professional dealing with cryptography. However, the central banks across the globe are now planning to launch their virtual currencies. They will club the fiat and digital currency to establish the same. As per reports, this digital currency is called CBDC or CB Digital Currencies. The same reports suggest that more than sixty nations are now planning to launch their digital currency.
Out of these, 88% of governments rely on technologies like Blockchain, which is responsible for bringing out BTC. In reality, not all the CBDC will fall in the category of digital currency. As of now, we hear reports suggesting that the Bahamas are among the first nations to launch their own CBDC. It comes as a combination of CBDC and their local currency. On the other hand’s countries like chasing the idea of their digital currency. They have plans to bring it soon. North America has two critical investigation programs running to study cryptocurrency, while the UK is also consulting its banks and retailers to decide its strategy.