On 7th September, Bitcoin will become the legal tender of El Salvador. And while it is for the best, there have been protests on the street that they don’t want BTC as a legal tender. But the country’s finance minister has made it clear that Bitcoin is not compulsory to use in El Salvador, and they are not replacing the dollar. So, I don’t think it is a problem that they are implementing it as people can choose what they want to use.
Bitcoin in El Salvador
The country has been dependent on the US dollar as a medium of exchange for a long time. And even now, they do not plan on changing that. The country’s Finance minister Zelaya said that the government, business and everyone else would use dollars for accounting. It seems that Bitcoin will be treated as a payment medium only, and everyone needs to accept it. But at the same time, the majority of the work will be done in dollars.
There will also be a conversion mechanism in place between the dollar and Bitcoin. And the banks will be obliged to do the conversion for the public as they have agreed with the standards.
Let’s see why we need BTC as a currency
.Some of you must have read the statement and are thinking. Bitcoin is too volatile to be a currency. Well, it’s all about perspectives. If you live in the US, China, India or any other major country where they have a stable economy, then yes, BTC does seem volatile. Today your portfolio is $500, and tomorrow it could be $420 and the next day $550. But the point is not all countries have this kind of stable economy.
One of the biggest examples of this is Venezuela, where the inflation rate is in the millions. This is because the government has recklessly printed money, thinking it could help pay off debt. But this resulted in depreciation of the assets held by the common public. The inflation is so bad there that the value of money could decrease by 50% in a week. And for those people, 10% fluctuation and volatility is not a problem. Hence, Bitcoin has become very popular in Venezuela and many other countries where the inflation rates are significant. And to prevent such economic disasters from happening again, we need BTC as a currency.
All this information has been referred from a video of The Think School. You should check out the video if you want to get an even clearer idea of the same.
What are your thoughts on the adoption of Bitcoin as a currency? And do you think it is right that Bitcoin is not compulsory to use in El Salvador? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.