Will Adoption Of Bitcoin As A Legal Tender Lead To An Augmentation In Market Value Of Bitcoin?
Bitcoin is the first-ever cryptocurrency to acquire such an extent of the limelight in the global marketplace. However, as a currency, Bitcoin did not attain much popularity as the store value of bitcoin has always highlighted it as an investment asset.
However, people used bitcoin as a currency and not an investment. The prominent reason behind organizing a cryptocurrency like bitcoin was to eradicate centric domination. Meanwhile, bitcoin is utterly politically independent, and it is not a legally accepted currency in most of the region.
Adoption of bitcoin as a legal tender in diversified countries, especially developing ones, can do wonders. Moreover, accepting bitcoin as a national currency has ample benefits such as a rise in employment, easy transactions, and no international barriers.
However, will the adoption of bitcoin as a legal tender raise the market value of bitcoin? Below mentioned is an utter portion demonstrating the solution to your query, so let’s have a look without wasting any further ado.
El Salvador Accepting Bitcoin as a Legal Tender!
Satoshi Nakamoto, a Japanese programmer, invented Bitcoin in early 2008. El Salvador has now become the first-ever country to accept bitcoin as a legal tender. Nayab, the president of El Salvador, recently announced that bitcoin would be a legal currency in El Salvador due to the embrace of the ease of remittance. Recently El Salvador has finally adopted bitcoin as a legal tender. Here are the benefits of accepting bitcoin as a legal tender in El Salvador.
Remittance refers to the amount of money sent by Salvadorans from the United States to their country. The fact might amaze you that remittance reached an amount of almost $6 billion recently. Moreover, this sum contributes almost 23% to the economy of El Salvador. E-banking platforms and traditional banking systems levies a vast amount of transaction fees while transferring money. If you want to know more about bitcoin trading, then you can click here .
The president of El Salvador can nearly save up to $400 million every year on remittance. In a nutshell, adopting bitcoin as a legal tender can contribute to decreasing the remittance fees. The prominent reason is that bitcoin is decentralized. There is no political power that can control bitcoin since bitcoin is a decentralized, trustable exchange that allows you to transfer bitcoin and levies you a lesser amount of transaction fees than of traditional banking systems.
As per the government authorities of El Salvador, the adoption of bitcoin as a legal tender will boost the country’s economy as well. As a result, organizations and companies will hire more people to maintain their cryptocurrency balance sheets.
Bitcoin mining, the progression of adding new bitcoin units to the circulations, consumes a vast amount of electricity. However, El Salvador has decided to utilize geothermal energy to mine bitcoin units using the country’s volcano. Such actions will make organizations from diversified countries invest in such plants, boosting El Salvador’s economy.
Will Accepting Bitcoin As A Legal Tender Increase The Market Value Of Bitcoin?
Bitcoin is a decentralized currency which means higher authorities cannot influence and control the value of bitcoin. Therefore, the market value of bitcoin is very fragile and gets affected by nominal factors. The market value of any cryptocurrencies or stock increases when more and more people get involved.
If we accept bitcoin as a legal tender, undoubtedly, it will increase the market price of bitcoin. The prominent reason for this is that the population of an explicit country will buy bitcoin to transfer funds commencing bitcoin. Such progression will increase the market cap of bitcoin.
Can bitcoin replace fiat currency?
Undeniably bitcoin was to replace fiat currencies, but can it replace fiat currencies. No, bitcoin is a political indent currency which makes the value of bitcoin very fragile and volatile. In contrast to bitcoin, fiat currencies are exceedingly stable.
The store value of bitcoin might be high, but for being a fiat currency, it does not have stability. All the more crypto regulation rules of any country can affect the market value of bitcoin.
The portion mentioned above is everything you should know about bitcoin as a fiat currency.