You must have already heard about it if you keep updated with the news of the crypto world – a country finally accepted bitcoin as a form of legal currency and now can be used at every merchant and vendor in the country as legal tender.
This is a massive step towards popularizing cryptocurrency and integrating it with the local economic system of the various countries around the world. The people who became bitcoin billionaires from investing in the early stages of bitcoin and cashing them out later can greatly benefit from these changes because it will allow them to use their cryptocurrency that much more easily.
There are several investors out there that have started investing in Bitcoin and if you wish to know about them, you can read more here. But by now you must be extremely curious – exactly which country in the world finally decided to adopt Bitcoin as a legal tender? In this article we will answer that exact question along with many others so read the article till the end to ensure you don’t miss out on any crucial details.
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So which country exactly adopted Bitcoin as legal tender?
Just until a few years ago bitcoin was considered to be a “fake currency” or a currency that didn’t exist in real life and thus had no implications in the real world. Now bitcoin, along with the rest of the crypto market, is capped at a total market value of several trillion dollars.
To ensure that their country matches the growth of this valuable cryptocurrency and is fully integrated into the nation’s economy, there is one single country that decided that it would adopt Bitcoin as a legal tender. This country is none other than El Salvador who made global headlines everywhere as they emerged as the first nation in the world to accept Bitcoin as an actual legal currency.
This wasn’t a rush-hour decision that was enacted on the spot – it was a result of several years of planning and continuous support for the world of cryptocurrency and bitcoin. This support majorly came from the young president of El Salvador, Nayib Bukele, who firmly believes that Bitcoin can change the country’s economy dramatically and cause it to flourish.
While that matter is still yet to be determined because of the country’s still unstable economy, it has attracted praise, commendation and criticism from all across the world. The criticism also came from the country itself where many people seemed to have not liked the country’s decision of adopting Bitcoin.
According to recent surveys, most of the country’s meager population opposes the decision of making Bitcoin into a mainstream legal tender. Many of them claim that they won’t be budging away from that decision of sticking with their original currency, i.e. USD, for day to day transactions and tasks.
While it may seem strange at first, considering the President himself is offering various monetary benefits to those who open their crypto wallet, when you put yourself in the shoes of the average El Salvadorian, you get a pretty good idea of why they are doing what they are doing.
Many of them question the government’s decision regarding this matter and consider the decision to be taken entirely by the government authorities themselves instead of consulting the people.
What’s the importance of having Bitcoin as a legal currency?
The government of El Salvador, to facilitate these transactions and provide monetary benefits to everyone in bitcoin form, has bought a net sum of 400 bitcoins from the cryptocurrency market. This huge amount of bitcoins came up to about $21 million, and according to the government, the El Salvadoran citizens should expect more along the way.
This decision has had a large impact on not only the country’s own economy but on the entire cryptocurrency market itself. Bitcoin prices hiked at a dramatic rate after the country made the cryptocurrency legal. Unfortunately, most of the prices hiked down almost immediately as every investor around the planet finally got a chance to sell their cryptocurrency at a decent rate since its steady slump from June.
This decision will also have large reaching consequences for the future. Taking El Salvador’s lead, it wouldn’t be uncommon to see other countries around the world starting to accept Bitcoin as a legal tender for their own economy.
Considering the relevance of the cryptocurrency market is only going to increase in the future, it is a good idea that countries start adopting reforms and changes in their economy that can make the shift from physical to virtual currency possible.
Given a few years, according to experts, US and many European countries can consider adopting Bitcoin as a currency option for their citizens to use if they so wish.
Concerns regarding use of Bitcoin as legal tender.
The integration of Bitcoin into the real world economy of El Salvador has not been as seamless as people thought it would be. No one expected the decision to get as much opposition as it did with people and many consider it to be an ill-suited decision for the country.
The main argument against Bitcoin by the protesters is that the poor man can’t avail the benefits of the decision. After all, if the people below the poverty line can barely afford food, how can they be expected to have the technological means to conduct Bitcoin transactions and the financial features to invest in the cryptocurrency?
There is also the volatility factor attached to bitcoin, and many other cryptocurrencies around the world, that can make the prices of goods and services fluctuate wildly on the cryptocurrency market.
In the worst case scenario, an average citizen can be robbed off his money when he purchases some bitcoin using fiat currency at a specific date and then tries to purchase a commodity of equal value but fails to do so because the bitcoin market crashed recently after the consumer made the decision of investing in it.
El Salvador may have taken a huge leap forward for integrating cryptocurrency with the real world economy but there are still many aspects that need to be reformed with due haste. We hope this article was insightful for you and if it was, then please consider following our website for regular updates as it will help us out immensely.