Bank of America supports El Salvador’s legalization of Bitcoin as currency
By Bob Garcia
The financial giant recognizes that cryptocurrency can help the unbanked population
El Salvador and president Nayib Bukele are getting a big thumbs up from Bank Of America (BOA), one of the largest financial institutions in the US, after indicating its intention to include Bitcoin as a strategic plan in the Latin American country’s economy. While the financial institution has maintained a hands-off approach to cryptocurrency, it might be coming around, realizing that one of the original covenants of crypto can succeed where banks can’t.
According to a recently published report, analysts at BOA agree that El Salvador’s decision to recognize Bitcoin as a legal tender could be a complete game-changer. According to these specialists, such a move could promote financial digitalization, streamline remittances, provide consumers with a wider range of options and clearly pave the way for El Salvador to have a closer relationship with US companies and digital currency miners.
According to the bank, remittances account for a staggering 24% of El Salvador’s gross domestic product. However, most of this percentage goes to transaction fees, which could be a thing of the past with the incursion of a currency like Bitcoin. “Using Bitcoin for remittances could potentially reduce transaction costs compared to traditional remittance channels,” the report said, according to an image provided by state-backed Diario El Salvador. “The idea is that Bitcoin could be used as an intermediary for cross-border transfer so that the sender converts dollars to Bitcoin and then the receiver converts them to dollars domestically.”
El Salvador’s decision has undoubtedly marked an important milestone in the evolution of this digital currency, especially since widespread acceptance is something that has been slow in coming. Although many Salvadorans are still skeptical about Bukele’s strategy, it has been made clear that everything is being developed in a way that makes it very easy to use. All those who decide to adopt Bitcoin will have access to a wallet called Chivo Bitcoin, which will have the proper support of the state. However, other wallets can be used, as well.