Nearly 70% of the adult El Salvadoran population does not possess bank accounts, according to a recent report by the Bank of America. In this respect, broadening the access span of electronic payments via Bitcoin (BTC) has some progressive inductions. Bank of America, which is considered to be among the biggest financial institutions across the country, suggests that El Salvador could gain a lot because of its new venture into BTC.
In a recent week’s published report, the bank analysts stated that the benefits such as exposing the country to digital miners and American companies, offering a greater choice to the consumers, encouraging financial digitalization, and the streamlining of remittances, can be achieved by El Salvador through the legalization of the Bitcoin tender. Accordingly, the bank mentioned that 24% of the country’s GDP (gross domestic product) is to be consumed under remittances; however, a substantial sum accounts for transaction fees.
The report additionally noted that the utilization of BTC would considerably minimize the transaction costs in comparison with the traditional channels for remittances. Diario El Salvador (a state-backed newspaper) disclosed an image of the report which expressed that the concept of using Bitcoin for an intermediary to handle cross-border transfers is the probably better one as the dollars would be converted into BTC by the sender and the receiver would get dollars after converting from BTC.
During June this year, the crypto community witnessed that El Salvador turned into the first country to embrace BTC as a legal tender which proved to be a milestone in the evolution of digital currency from being obscure to mainstream adoption. The Caribbean and Latin American Economic Commission, as well as International Monetary Fund, have criticized the country’s decision of BTC integration into its financial system. In the meantime, JPMorgan Chase is of the view that extra pressure has already limited the network’s ability to function as an exchange medium.
It has been figured out by the survey data that almost half of the El Salvadoran population is still sceptical regarding BTC being granted a legalized position. The people interested in adopting Bitcoin for transactions are allowed to utilize the state-backed wallet named Chivo Bitcoin, which is one of many other options accessible to them. Consequently, many of the rest of Latin American countries have signalled that they are seeking for adequate crypto strategy; however, none of the countries has followed the footsteps of El Salvador.