Bank of America analysts stated that El Salvador\u2019s decision to recognize Bitcoin as legal tender could facilitate money transfers, financial digitization, give consumers more options, and open the country up to US companies and digital currency miners.Read: Microstrategy CEO, Michael Saylor Defends $2.2 Billion Debt-Financed Bitcoin BuysBank of America, the US\u2019s largest bank, recognized many benefits that Bitcoin offers El Salvador in an extraordinary gesture of support.According to the bank, the introduction of Bitcoin could reduce the cost of sending remittances. These remittances account for almost a quarter of the country\u2019s gross national product. This could, in turn, increase Salvadorans disposable income.Another benefit of Bitcoin adoption is the provision of banking services to non-bank customers. 70% of El Salvador\u2019s population does not have access to a banking account.El Salvador, like Iceland, could also attract foreign direct investment flows.Read: State Street The Second-Oldest Continually Operating United States Bank To Offer Crypto ServicesThe report writes:\u201cUsing Bitcoin for remittances could potentially reduce transaction costs compared to traditional remittance channels. The idea is that Bitcoin could be used as an intermediary for the cross-border transfer, so that dollars are converted to Bitcoin by the sender and then converted back to dollars domestically by the receiver. Volatility could be reduced if conversions happen automatically.If Bitcoin indeed lower transaction costs, then for every Dollar the Salvadoran sends home, a greater portion of that Dollar could be received by the recipient\u2019s increasing their disposable income and reducing the portion of remittances lost to financial intermediaries.Another positive implication is financial digitalization, More than 70% of adult population in El Salvador does not have a bank account, For that reason democratizing access to electronic payments, through Bitcoin, has a progressive touch.One could make the case that adopting Bitcoin as legal tender is about more choice to consumers, embracing innovation\u2026<\/p>","protected":false},"excerpt":{"rendered":"
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