El Salvador will benefit from adopting bitcoin, says Bank of America

There are several advantages of adopting bitcoin (BTC) as legal tender in El Salvador, according to the Bank of America. In a document shared by the president of the Central American country, Nayib Bukele, the US institution specifically refers to four benefits.

According to Bank of America, El Salvador will benefit from its adoption of cryptocurrency in aspects such as remittances, financial digitization, greater options for consumers and the possibility of opening business channels with foreign companies.

The document, which Bukele exposed via Twitter this Sunday August 1, ensures that “the use of bitcoin for remittances could potentially reduce transaction costs compared to traditional remittance channels. ‘

The bank recognizes the high incidence of remittances from Salvadorans abroad and, if indeed the use of cryptocurrency can reduce costs, remittance receivers and senders would clearly benefit.

[Usando bitcoin] For every dollar that the Salvadoran diaspora sends home, recipients could receive a larger share of that dollar, increasing their disposable income and reducing the proportion of remittances lost to financial intermediaries.

Bank of America.

Regarding digitization, the text speaks of the «progressive touch» that the “Democratization of digital payments through bitcoin” in a country with a vast majority of unbanked adults.

Additionally, they refer to the adoption of bitcoin as a way to give consumers more options. And they add in this regard that they do not consider the legal obligation for businesses to accept cryptocurrency to be “coercive” “as long as they have the appropriate technological infrastructure.” In this sense, the existence of the Chivo wallet, created by the Salvadoran government, stands out; and the ability for the merchant to convert your BTC payment directly into dollars.

Finally, Bank of America refers to the potential foreign investment that would bring entry to new industries associated with Bitcoin: mining, payment gateways, ATM operators of cryptocurrencies.

For or against bitcoin

The brief report from Bank of America is striking, taking into account that just a few months ago bitcoin was referred to as “impractical.” Especially, in that report reviewed in CriptoNoticias, they referred to the volatility of bitcoin as a lock for your utility as a reserve of value or means of payment. Now, they seem to support that use.

Furthermore, this stance is in stark contrast to that of other reputable financial institutions. JP Morgan, for example, assured in mid-July that the adoption of bitcoin in El Salvador it would be problematic both for the country and for the cryptocurrency.