Bank Of America Highlights Four Potential Benefits Of El Salvador's Bitcoin Strategy

Kavya  |  Aug 2, 2021

Bank of America, one of the country's top financial institutions in terms of total assets, highlighted the potential benefits of El Salvador’s Bitcoin strategy, which might benefit greatly from its recent entry into Bitcoin (BTC).

El Salvador’s Highlights Potential Benefits Of Bitcoin 

According to the latest Global Research study from Bank of America, “more than 70% of El Salvador's adult population does not have a bank account. 

As a result, democratizing access to electronic payments via Bitcoin has a progressive undertone.”

According to a report released last week by the bank's specialists, El Salvador's decision to adopt Bitcoin as legal tender may streamline transfers, increase financial digitization, provide clients with more alternatives, and open the country up to American firms and digital currency miners.

Remittances make for a stunning 24 percent of El Salvador's GDP, according to the bank, but a significant chunk of that goes toward processing fees.

According to an image provided by the state-backed Diario El Salvador, “using Bitcoin for remittances may result in considerably cheaper transaction costs when compared to conventional transfer channels.”

“The idea is that Bitcoin might be used as a middleman for cross-border transfers, such that dollars are changed to Bitcoin by the sender and then returned to dollars by the receiver domestically.”

El Salvador Became The First Country To Recognize Bitcoin As Legal Currency

El Salvador became the first nation-state to accept Bitcoin as legal cash in June of this year, marking a crucial step in the digital currency's journey from obscurity to widespread acceptance. 

The International Monetary Fund and the United Nations Economic Commission for Latin America and the Caribbean have also criticized the move to incorporate BTC into the country's banking system. 

Meanwhile, JPMorgan Chase believes El Salvador's Bitcoin gamble will put extra strain on the network's already restricted capacity to function as a means of exchange.

According to survey results, half of the Salvadorans are wary about adopting Bitcoin as legal money. 

Those who want to utilize BTC for transactions can use the state-backed Chivo Bitcoin wallet, among many other choices.

Since El Salvador made Bitcoin legal tender, many other Latin American countries have hinted at following their own cryptocurrency approach. 

However, no other country has followed in El Salvador's footsteps until today.

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