One of the largest financial institutions in the world has voiced its support for El Salvador’s move to adopt Bitcoin as legal tender. The Bank of America gave a number of reasons why the decision could be beneficial to the Central American country in a recently published research footnote.
Using Bitcoin for remittances could potentially reduce transaction costs compared to traditional remittances channels […] If using Bitcoin indeed lowers transaction costs, then for every dollar that the Salvadoran diaspora sends home, a greater portion of that dollar could be received by recipients, increasing their disposable income and reducing the proportion of remittances lost to financial intermediaries.
The supposed benefits of El Salvador’s Bitcoin bill include reduced hassle to open and work a checking account, decreased price of remittances, as well as the ease of attracting international investment, international direct investments, and kick-starting monetary digitization.
While the Bank of America appears to view El Salvador’s move in a positive light, many global agencies like the World Bank and the IMF have frowned at the country’s decision to adopt Bitcoin. The government’s opposition party has also held protests against the bill, calling it “unconstitutional.”
As earlier reported by BTC PEERS, President Nayib Bukele disclosed his intentions to make Bitcoin a legal form of money in El Salvador during the Bitcoin 2021 Conference in Miami. The plans were later set in motion when Bukele announced on Twitter that 62 out of 84 lawmakers in the Legislative Assembly had agreed to adopt the leading cryptocurrency as legal tender.