Bank of America highlighted 4 potential benefits of El Salvador’s Bitcoin strategy
Bank of America believes El Salvador could have a lot of benefits with its Bitcoin strategy.
“More than 70% of the adult population of El Salvador does not have a bank account,” according to the Bank of America’s latest Global Research report. “For that reason, democratizing access to electronic payments, through Bitcoin, has a progressive touch.”
In a report published last week, analysts of the bank said El Salvador’s decision to consider BTC as legal tender could streamline remittances, promote financial digitization, provide users with greater choice and open up the country to American firms and digital currency miners.
The bank of america noted that payment accounts for a staggering 24% of El Salvador’s gross domestic product, but a sizable chunk of that goes toward transaction fees.
“Using Bitcoin for remittances could potentially reduce transaction costs compared to traditional remittance channels,” the report stated, as per image provided by state-backed Diario El Salvador. “The idea is that Bitcoin could be used as an intermediary for the cross-border transfer, so that dollars are converted to Bitcoin by the sender and then converted back to dollars domestically by the receiver.”
El Salvador made an important milestone in the cryptocurrency industry by accepting the BTC as a legal tender in june,2021.
Survey data shows half of Salvadorians are having doubts about using Bitcoin as legal tender. Those who choose to adopt Bitcoin for transactions can use the state-backed Chivo Bitcoin wallet, from many other options available to them.
Since El Salvador recognized Bitcoin as legal tender, several other Latin American nations gave hints that they were applying a cryptocurrency strategy of their own. However, until now, no one has followed in El Salvador’s footsteps.