El Salvador might be the first country to officially accept the famous Cryptocurrency. According to CNBC, President Nayib Bukele said he would propose a bill that made Bitcoin legal tender next to the US dollar. The government will work with a digital wallet company strike to build a financial framework around the digital monetary format.
The founder of Strike, Jack Mallers, claiming Bitcoin will help countries such as El Salvador protect themselves from inflation “potential shocks” for traditional currencies.
The bill is likely to pass when the Bukele controls the El Salvador legislature.
This step may not be audible as seen. CNBC notes that the transfer of money from migrants represents around 20 percent of Gross Domestic Product El Salvador, and often includes high transaction costs and a long delay. Bitcoin and other cryptocurrency can make the transfer more practical and direct. Citizens certainly like digital payments – App Strike became one of the most popular applications in the country when it was launched there in March.
But this still represents significant betting. Bitcoin is not supported by stable resources such as gold or major government governments. Like other cryptocurrency, this is very fluctuative – big nails and drops are often bound by events that will be considered small elsewhere. Residents who calculate the transfer of Bitcoin to meet the need can be destroyed if the value drops with a little warning.
Only launching Crypto payments is also not a successful guarantee. Venezuela hasn’t so far with Petro’s currency, although it is mainly intended as the end of running around international sanctions. It is also bound to oil, which has its own volatility thanks to the Pandemic Covid-19.
However, if the El Salvador step is successful, it can provide Bitcoin and other cryptocurrency other footing in the world of mainstream finances by making it easy to do business with the whole country. It’s just that, don’t expect other countries in harmony with Bitcoin. The US Federal Reserve, for example, is researching its own digital currency. Salvadors may still have to deal with exchange rates and other hassles, even if the all-digital currency will eliminate some of their other challenges.