Bank of America outlines 4 potential benefits of El Salvador’s Bitcoin strategy

Bank of America is one of the country’s largest financial institutions by total assets, and it believes that El Salvador may gain a lot of gains from its recent venture into Bitcoin (Bitcoin).

In a report released last week, the bank’s analysts stated that El Salvador’s decision to recognize BTC as a legal tender could simplify remittances, promote financial digitization, provide consumers with more choices, and open the issue to U.S. companies and digital currency miners. country.

The bank noted that remittances accounted for a staggering 24% of El Salvador’s GDP, but a large part of it was used for transaction costs.

“Compared with traditional remittance channels, using Bitcoin for remittances may reduce transaction costs,” the report Say, According to the picture provided by the state-sponsored Diario El Salvador. “The idea is that Bitcoin can be used as an intermediary for cross-border transfers, so that U.S. dollars can be converted to Bitcoin by the sender, and then converted back to U.S. dollars by the receiver in the country.”

#El Salvador President @nayibbukele Share some opportunities this morning @Bank of America Seen in El Salvador, after adoption #Bitcoin pic.twitter.com/08D1RuGFYI

-El Salvador Newspaper (@elsalvador) August 1, 2021

In June of this year, El Salvador became the first nation-state to accept Bitcoin as legal tender, marking an important milestone for digital currency from obscurity to mainstream acceptance. The decision to include BTC in the country’s financial system has been criticized by the European Union. International Monetary Fund And the United Nations’ Economic Commission for Latin America and the CaribbeanAt the same time, JPMorgan Chase believes that El Salvador’s Bitcoin strategy can Extra pressure The network’s ability as a medium of exchange has been limited.

Survey data shows Half of Salvadorans are skeptical Regarding the use of BTC as legal currency.Those who choose to use BTC for transactions can use the state-backed Chivo Bitcoin wallet, which includes They can use many other options.

Since El Salvador recognized Bitcoin as legal tender, several other Latin American countries have hinted Pursue your own cryptocurrency strategyHowever, until now, no other country has followed in the footsteps of El Salvador.