President Nayib Bukele of El Salvador first proposed making Bitcoin legal tender in June, and now expects the top cryptocurrency to be adopted in early September following the proposal’s ratification.
According to Bank of America, Bitcoin can provide some significant benefits to the Latin American country.
A big advantage for the bank is that around 70% of El Salvador’s inhabitants do not have access to a bank account or financial services.
President Bukele retweeted a tweet regarding the news.
President Bukele’s main goal was to minimise the cost of remittances, and Bitcoin may help him achieve that. Remittances from overseas currently account for one-fifth of El Salvador’s gross domestic product. Salvadorans would be able to have more disposable income as a result.
While El Salvador intends to mine Bitcoin using geothermal energy from its volcanoes, Bukele indicated that a mining hub is being constructed to run on cost-effective, clean, and sustainable energy.
A series of tweets by President Nayib Bukele confirming the stats released by bank of america can be seen.
Bank of America went on to say that financial digitization is another beneficial result of Bitcoin acceptance, and that democratising access to electronic payments is progressive.
An uncertain IMF funding situation has caused Moody’s Investor Service to reduce the El Salvadorian government’s rating. El Salvador’s opposition party sued the government in late June, claiming that the Bitcoin law was unconstitutional.
Around 80% of the country’s citizens agree with the argument, claiming that the new law did not take into account negative consequences.
Cryptocurrencies, according to the IMF, are linked to money laundering and terrorism financing, and pose macroeconomic and environmental concerns.
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