El Salvador manages to keep the attention of the entire crypto community for a month already, and all thanks to a recent bill that made BTC a legal tender. Yet, some people believe the new Bitcoin law to be overrated.
About a month ago El Salvador adopted BTC as a legal tender. Some people say that the new Bitcoin law would make it to the history books, others are worried about the aftermath, and some expect developing countries to follow the example and start using Bitcoin to change their economic situation for the better.
There is also a belief that the new economic approach is overestimated.
Fidelity Investment analyst, Jurrien Timmer, is one of those people voiced his position in one of his recent interviews:
”The development is definitely interesting but I think its significance is a little bit overplayed…its not like they have dropped US Dollar. All the trades are still settled in USD and people can decide between the two, but it is the first real test for Bitcoin as value of exchange.”
Yet, Timmer still noted that even if Bitcoin has not yet become popular with Salvadorans, it does not negate the fact that this is the first time BTC is being used as the basis of the country’s economy along with the dollar.
When adopted, the new Bitcoin law was chastised by many global monetary authorities, including the International Monetary Fund (IMF) and the World Bank.
Twenty days into force, the new Bitcoin law has already proved to be beneficial, since it helps facilitate the life of the majority of the country’s population.
Official statistics state that more than 70% of Salvadorans have never used banking services. That was a big challenge for the country, where the majority of people received financial support from the abroad-living relatives who had to pay humongous commission fees.
Bitcoin helped cope with high fees reducing them to a minimum. To facilitate BTC transfers, the government has launched a new national virtual wallet Chivo. Its main advantage is that there are no commissions for Bitcoin (BTC) transfers.
Despite the fact that the initiative was met with street protests, the official Chivo website shows a slow, but constant increase in the number of app downloads, which indicates that Bitcoin is gradually taking root in El Salvador.
The success of El Salvador has prompted Argentina and Paraguay, as well as many other countries of South and Central America, to start talks on adopting crypto.
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The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
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