El Salvador president Nayib Bukele on 9, June 2021 made a historical announcement when he tweeted the nation’s massive decision to make Bitcoin legal tender. The most popular and valuable cryptocurrency in the world today made history as it would be used by El Salvador’s citizens as a medium of exchange. The decision came with 62 out of 84 votes swinging in favor of the decision to make BTC legal tender. This will surely be great precedence for the coin and other cryptos as well.
One of the main challenges crypto is facing now is adoption. El Salvador’s leadership has just opened the way for cryptocurrency to be adopted. One of the challenges the country will face is exchanging the coin when it is volatile. Time will tell whether this is a great move or the naysayers will have their day. The 18 who voted against the move will be keen and ready to say “you should have listened to us!”
Politics aside, what does this mean to the El Salvador economy and the world at large? One of the reasons the president made this proposal, he said, was to allow more El Salvador residents living abroad to send money back home without gateway challenges. This was a move to facilitate financial inclusion, which remains one of the major reasons cryptocurrency exists.
There are more reasons why BTC adoption has been a challenge, and other cryptocurrencies as well. El Salvador and most of the developing and underdeveloped do not all have the software and hardware to support this technology. Cognizant of this fact, the president and his team have allowed the use of other legal tender options in the case there is no technology to support the exchange.
This is always an issue when a certain technology is introduced. But as days go by, people become more open and adopt the technology without fear. For a while now, BTC and other technologies have been swept under the carpet by individuals fearing the technology might disrupt their dominance in economies. For that reason, they spread hate towards the coin and this paints the technology dark and useless.
The move by El Salvador to approve the president’s proposal is a new dawn. It is a great win for technology. If more economies did this, then BTC’s price might be more stable in the future. Another thing to note is that whenever the price of BTC rises, the others are also affected. This move might see the prize of this crypto stabilize. The ripple effect would be people will start believing in the coin more. Most individuals prefer investments with lesser risks and that is why they may be pushed to invest in the coin if the prices become more stable.
According to https://www.coindesk.com/el-salvador-residents-are-split-on-bitcoin-adoption-bill, El Salvador residents are split in opinion on this. Not all are for the mood. For that reason, it might be a challenge to fully adopt the bill. To counter that, Miguel Kattan announced that the coin would be legal tender and mandatory to use unless in rare circumstances. The exemptions have been laid out already. The Secretary of commerce was categorical in his statement but keen to caution that the coin is not replacing the US dollar.
The announcement has now put El Salvador on the world’s radar. Governments and powerful individuals will be keenly looking to see how successful this would be. Adoption of the bill is one step, but full implementation is another. It is now up to El Salvador and its residents to ensure this is a success. If it succeeds, you can be sure more countries will do the same. The reverse is true! If the adoption fails, you can be sure blockchain technology will continue to face resistance. And, El Salvador will forever be a case study.
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