El Salvador paving the way for others
How the Central American country is leading the way.
When El Salvador took the plunge to officially make Bitcoin legal tender and announced its plans for Bitcoin City, there was an outpouring of criticism. Of course, there were some positive voices coming through the crowds, however, the overwhelming response was that the country would regret its historic move to embracing cryptocurrency. Now, several months on, it seems that the nay-sayers were wrong, and that El Salvador is in fact paving the way for others to follow in its footsteps.
CRITICISM FOR BITCOIN
In September of 2021, El Salvador officially made Bitcoin legal tender across the country, and while this was a monumental move, it wasn’t without its issues. The launch of the Chivo app – a digital wallet designed for cryptocurrency – resulted in server crashes and delays, which for almost any digital launch are largely unavoidable. However, governments across the world fed off this inevitable issue and branded the decision as rash and not thought out properly.
The same criticism was received when plans for Bitcoin City were unveiled, with concerns that the President was doubling down on an unstable plan. But now, six months on from the historic decision, the opinions seem to be slowly changing.
EL SALVADOR LEADING THE WAY
El Salvador’s adoption of Bitcoin as legal tender has made an impression on countries around the world, and a number are said to be considering following suit. It’s mostly low income countries that are contemplating the move, with them looking to step away from the traditional financial set-up that is struggling to serve them fully. It’s thought that an alternative, such as cryptocurrency, might be what they need to gain back some financial strength.
Bitcoin would allow citizens to avoid the bias and barriers that so often come with traditional banking methods, and would be free from the effects of inflation and local economy market conditions. This makes it an ideal currency option for individuals and businesses that are shut out from traditional channels due to socio-economic circumstances, which is what many low income countries have identified.
Among the suspected countries are Paraguay, Guatemala, and Panama.
THE FUTURE OF CRYPTOCURRENCY
The fact that more countries are considering making Bitcoin legal tender speaks volumes for the future of cryptocurrency. The legalization of Bitcoin positions cryptocurrency as a truly legitimate form of finance, just like the dollar or pound. Previously, with the currency only being available for trading and not tangible purchases, it felt almost abstract and impalpable, but its legalization has changed the game.
Ultimately, the more countries that adopt cryptocurrency as legal tender, the more stable the market and economy will become, resulting in a more viable currency all round. In terms of crypto’s future, the more countries that legalize and adopt the currency, the better.
Of course, cryptocurrency as a legitimate and legal currency is still in its infancy, and it’s hard to tell exactly what is to come in its future. However, the fact that others are seeing its very real potential in the same way that El Salvador has, is promising. This is just the beginning, and in another 12 months the landscape of cryptocurrency may well be even brighter.
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