Bitcoin will become legal tender in El Salvador, a step towards the adoption of cryptocurrency.
At the Miami Bitcoin Conference, Jack Mallers, the CEO of the Layer 2 Lightning Network and its cross-border remittance app Strike, commented that El Salvador’s plan to adopt Bitcoin as a legal tender was heard all over the world . But how important is El Salvador’s plans for Bitcoin and cryptocurrencies? continue reading.
Yeso, Tyrone, take your fat ass off the sofa and go to dinner! When Aliya handed him two 150-ounce sealed Tide™ bottles of beer, she yelled at her husband with cordial intimacy. Tyrone complained—the way he admitted—yes, dear, I love you too. He put the detergent in a plastic shopping bag, and then tucked it under his arm like a running back to protect the pigskin in the Super Bowl.
Tyrone walked around the corner and handed the bag to Jamal. Jamal checked that the seal was intact before putting the bag in the trunk of the car. Jamal reached into his pocket and handed Tyrone a ten dollar bill. There was no exchange of a word—it was not necessary—within 10 minutes off the sofa, Aliyah and Tyrone were happily enjoying their Sunday night dinner.
In communities across the United States, the tide is the unwritten legal tender of the ghetto. Proctor & Gamble owns 15 detergent brands worldwide, but Tide is its flagship brand. Most of the innovations were launched with Tide, which is considered to be one of the three most resistant brands in the world. Tide can be identified immediately, is difficult to forge, is widely accepted, is not affected by inflation, has a good storage of value, is physically stable, and is a good accounting unit, which is very suitable for removing stains on clothes.
Good money is still not because its value is inherently derived, that is, it is an excellent cleaner. But for those without a bank account, the global estimate is about 22%, which is even higher in underdeveloped countries. Sadly, the inconvenience and lack of choice is a desperate way of life.
The President of El Salvador, Nayib Bukele, announced that he will introduce a bill next week to officially make Bitcoin a legal tender in El Salvador, which will effectively make El Salvador the first country to do so. El Salvador is one of about six countries that use the U.S. dollar as its de facto currency. This does not include U.S. territories such as Guam and Puerto Rico. Cambodia’s official currency is its native riel, but it is not as widely accepted as the U.S. dollar.
why is that? In places like Cambodia, people trust the U.S. dollar more than they trust the local government. Similarly, most countries retain a large portion of their gold deposits in the Federal Reserve Bank of New York. The United States maintains its gold bar depository in Fort Knox, Tennessee. But for money and even gold, its value depends on the common trust of the people.
It is simple and complex. In other words, the value of any currency comes from the trust and universal acceptance within the network that uses it. Tell Elon Musk to bring gold to Mars, and he will soon discover that apart from its fascinating luster and conductivity, gold is almost worthless on this red planet.
El Salvador is a developing unbanked economy. 22% of its economy comes from foreign remittances. Cryptocurrency will become an effective currency mechanism that can inject funds into the economy by reducing fees and internal economic expenditures. Cryptocurrency is beneficial to developing countries, because for those without a bank account, cryptocurrency can help:
- International transfers are cheaper Than those made with traditional money.
- Reduce financial poverty, Increase the chance of getting service.
- They are fast, Because they can be sent at low cost in a few seconds.
- You have full control Your assets.
- They are free and universal.
- They are unstoppable Because no one can block transactions through the blockchain.
- Everyone can have a wallet Send and receive cryptocurrency.
El Salvador’s plan to adopt Bitcoin as legal tender is a big step towards adopting cryptocurrency. This is both iconic and a recognition that the advent of cryptocurrency has brought benefits to its people. One of the additional benefits of El Salvador is its decoupling from the monetary policy of the United States. If your hard-earned dollars are inflated by another country through endless printing, this will only have an inflationary effect on your money and will not benefit you at all, how would you feel? This is how foreigners feel about holding U.S. dollars.
The legitimacy of the governing body comes from its people. The legitimacy of cryptocurrency comes directly from the people who bypass any nation-state, so it is not restricted by national borders, nor is it affected by the whims of ruling institutions. Last weekend, the announcement did not seem to have much impact on Bitcoin prices, but it remains to be seen how this will work and which countries will fill the vacancies soon. On behalf of the people of El Salvador and the people of other parts of the world, I thank you and wish you good luck.