El Salvador remains the only country to ever accept Bitcoin as a legal tender and make it a part of its financial structure. Today you can find both Bitcoin and U.S. dollar as the legal currencies supported and orchestrated by El Salvador. No country has gone in the same direction as El Salvador did with Bitcoin, and possibly no one will look for a foreseeable future. According to William Je, who is the CEO of Hamilton investment management, this move that al Salvador made with Bitcoin might not be the very best of a financial model. It might be good in terms of an exception to the rule, but it is definitely not a strong model for the future of finance, neither on a global level nor for this very country in question.
He has his own take on why El Salvador did want to go through with this very transition. He says that one shouldn’t cross out the base facts when thinking about El Salvador as a country that made Bitcoin a legal gender. First off it is that El Salvador is a developing economy, and it is a nation that has undergone currency changes in the past. In 2001 the country replaced its national currency by the name of the colon with the US dollar.
And 20 years later, the country has yet done the same thing but now with Bitcoin, a decentralized cryptocurrency and something that is quite a hit among many nations. The very reason why El Salvador did this, according to William, is that a huge number of people or citizens of this country live and work abroad. The very mean of sustenance to the GDP of the country is the remittance sent over by the people who are living and working abroad.
Bitcoin became a thrilling addition to the various modes of payment available to the people as the COVID-19 pandemic hit the globe. People were using it, they liked it, and they wanted more of it. As a result, Bitcoin transactions skyrocketed, and El Salvador, a country whose economy solely based on the remittances acquired from abroad, saw this as an opportunity and accepted Bitcoin as a legal tender; it was not the best or the wisest of the choices, but it would just have to do for the country at the moment.