Even though global powers like the United States of America and China are not in favor of bitcoin, a few small nations are very much in favor of it. For example, you must have heard about El Salvador, which has recently accepted bitcoin into legal tender from chesworkshop.org . They are very much enthusiastic about bitcoin and believe that it is going to be very much successful in the future. But did you ever think of why El Salvador is thinking this way?
Well, you might have seen that many nations oppose El Salvador’s concept that bitcoin will be a successful legal tender, but some nations do not even support it. It poses a question about the intentions of El Salvador. If some international organizations like the international monetary fund are also telling El Salvador to withdraw the proposal, why is it going ahead? Well, the answer can be available in the below-given points.
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Cross Border Remittances
El Salvador is a tiny nation; therefore, many people from this country move to other countries to earn money. They do so to provide food and money to their families, and therefore, they have to send cross-border remittances. It is an essential source of income for the people living in El Salvador, but if it is done through Fiat money, the banks of the other nations charge a very high amount for it. Therefore, it will decrease the valuation of their cross-border remittances, and it can be maintained with the help of a bitcoin beagle legal tender in El Salvador.
More Banked Population
In the past few years, the population of El Salvador has been increasing, but the mechanism available by the government is not. Therefore, there is a lot of under-banked population in El Salvador, making it very difficult for the government to deliver the appropriate banking services. This problem will create further chaos in the nation; therefore, this problem needs to be solved as soon as possible. The authorities can do so with the help of bitcoin. Anyone can get access to bitcoin very quickly; therefore, the population will be wholly backed, and it will happen in the shortest time possible.
Easy Access To Everyone
Another essential thing that needs to be understood for bitcoin to be accepted as a legal tender in El Salvador is that it is very easily accessible for everyone. The population is increasing daily in El Salvador, but the services provided by the banks are not very progressive. Therefore, providing the appropriate infrastructure is difficult, but bitcoin already has that infrastructure. Every nation has access to bitcoin because the infrastructure is available to the whole world without any problems.
Maintaining treasuries is one of the essential things the government must do to ensure that people and the government have appropriate funds in times of crisis. Furthermore, the government can easily hold the bitcoin because it can store a large amount of value within just a small coin. Therefore, it increases the availability of funds in the hands of the government and makes it even more superior than ever before. There for, El Salvador accepted bitcoin into its legal system.
Better Chances Of Growth
The chances of growth are much more in the bitcoin than in the country’s Fiat money. You might have seen that the United States dollars were earlier accepted as legal tender in El Salvador. It raised many concerns because the country felt that the United States dollar was degrading the quality of financial transactions. Later on, when they decided to add the bitcoin into their legal tender, they reserved bitcoin for a certain amount. This way, when the bitcoin value increases, the government’s capital will experience a hike.
Liquidity is the government’s main requirement to run the whole nation. Well, with the other types of commodities, sometimes, it can be tough to maintain, and the government faces it very difficult to convert them into cash. With bitcoins, this problem is easily solved. Bitcoins can be sold over digital platforms within a few minutes. It provides easy liquidity in the hands of the government, making it easily developable.