What is the practicality of El Salvador adopting a national digital currency? from freeamfva's blog
El Salvador's congress voted to accept the Cryptocurrency and won a supermajority of 62 out of 84 votes.To get more news about BSV, you can visit wikibit.com official website. Starting in September, El Salvador will soon have two official currencies: the U.S. dollar (USD) and bitcoin (BTC). In what is likely an unprecedented move for any nation worldwide, both USD and BTC can be used interchangeably within all government transactions — and this will likely make the nation a world leader in an increasingly digital era. Why Did El Salvador Move to Cryptocurrency？ According to a tweet from president Bukele, moving to cryptocurrency would promote “FINANCIAL inclusion, investment, tourism, innovation, and economic development for our country.” And he does have some facts and figures to support his claim. Some 70% of El Salvadorians are unbanked, meaning they dont have even a basic bank account. This means that 70% of citizens will always be one step behind, no matter how hard they try, and will have even more challenges accumulating wealth and saving what they already have. El Salvador also relies heavily on money sent back to the country from migrants. For example, a man working in the United States sending a portion of his paycheck to his family in El Salvador, or a woman working in Canada doing the same. Without a bank account, people in need of money will need to wait for physical cash to arrive at their doorsteps, a process that could potentially take weeks (no bank accounts mean no e-transfers). Thus, the ability to send and receive money instantly, without the use of a bank account, is very attractive to the unbanked. And now that a digital currency is legal, the unbanked can easily spend this money wherever they go, boosting the economy of El Salvador. What Is El Salvador's History with Bitcoin？ This decision didnt just come out of the blue, and El Salvador has indeed been experimenting with bitcoin for quite some time. Just recently, not one but two booming tourist destinations in El Salvador have begun accepting bitcoin as an alternative payment method: Punta Mango and Zonte (both known for their beautiful beaches). Shoppers can make payments for everyday needs like groceries and utilities with digital cash, allowing them to Buy their groceries with the touch of an app on their phone screens. An anonymous donor has been giving money to help make this happen. El Salvador has also been working to ensure the proper structures are in place so the transition can go as smoothly as possible. Days after the decision to adopt bitcoin, El Salvador announced a partnership with Strike, a digital wallet firm. This partnership will see the firm aiding the Central American country to build a financial infrastructure using Bitcoin technology. Are There Concerns from Other Countries？ Of course, this move to cryptocurrency is in direct opposition to many global superpowers. For, both China and India have restricted cryptocurrency trading. Places like the United States and the United Kingdom, in an effort to combat cryptocurrency, are exploring digital currencies via their central banks. The European Union seeks to do the same. The International Monetary Fund (IMF) has also said it has economic and legal concerns over the decision to make bitcoin a currency that is on par with legal tender. “Adoption of bitcoin as legal tender raises a number of macroeconomic, financial, and legal issues that require very careful analysis,” said Gerry Rice, an IMF spokesperson. He continued to say that the IMG would closely follow developments in El Salvador, in consultation with the authorities. However, El Salvadors adoption of bitcoin has inspired other Latin American countries and politicians to call for the same. Some of these countries include Paraguay, Panama, Brazil, Argentina, and even Mexico.
The Wall