According to the latest Bank of America Global Research study, more than 70% of El Salvador’s adult population does not have a bank account. As a result, democratizing electronic payment access through Bitcoin has a progressive ring to it.
According to analysts at the bank, El Salvador’s decision to accept Bitcoin as legal cash may expedite remittances, boost financial digitalization, provide customers more options, and open the nation up to American businesses and digital currency miners, according to a study issued last week.
The bank pointed out that remittances account for a whopping 24% of El Salvador‘s GDP but that a significant portion of it goes to processing costs.
According to an image given by state-backed Diario El Salvador, the article claimed that utilizing Bitcoin for remittances may lower transaction costs compared to traditional remittance methods. The concept is that Bitcoin may be used as a middleman for cross-border transfers, with the sender converting dollars to Bitcoin and the receiver converting dollars back to dollars locally.
In June of this year, El Salvador became the first country to accept Bitcoin as legal tender, marking a huge step forward in Bitcoin’s path from obscurity to widespread acceptance. The International Monetary Fund and the United Nations Economic Commission for Latin America and the Caribbean, on the other hand, have slammed the decision to integrate Bitcoin into the country’s financial system. Meanwhile, JPMorgan Chase believes El Salvador’s Bitcoin bet will exacerbate the network’s already stretched ability to serve as a medium of exchange.
According to survey results, half of the Salvadorans are wary about adopting Bitcoin as legal money. However, those who prefer to utilize BTC for transactions can use the Chivo Bitcoin wallet, which the government supports, among many other alternatives.
Since El Salvador made Bitcoin legal tender, many other Latin American countries have expressed interest in following their cryptocurrency approach. However, no other country has followed El Salvador‘s lead until today.