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How El Salvadorians life will change after adoption of Bitcoin on Sept 07th?


Central American nation El Salvador is set to make history in 10 days in adoption of Bitcoin as an official currency effective from September 07th. El Salvador is the first nation to adopt a cryptocurrency as its official currency. Not only Central American nations and United States of America, entire world is eagerly waiting to see how the financial situation of El Salvador going to be after Sept’07. Salvadoran President Nayib Bukele had proposed to recognize the world's oldest and arguably the most popular cryptocurrency as legal tender and the country's lawmakers agreed.

The country is in plan of constructing 200 Bitcoin ATMs ahead of September 07th across the nation. Everyone expected that more countries would follow El Salvador’s move. But no other nation adopted till now either bitcoin or any other cryptocurrency, the status of legal tender. When US, Canada and India have allowed trading of these virtual currencies, China and Russia are against to allowing the trading of cryptocurrency. There is huge pressure on Honduras which is the neighbor nation of El Salvador for cryptocurrency ATMs amid of rise in demand for virtual assets.


Reduce the cost of Remittance and Attract Foreign Direct Investment

Others wants to see the how the remittance cost would reduce after September 07th in El Salvador. Adoption of Bitcoin will facilitate remittance payments from Salvadorans living abroad. If the cost of remittances drops as they expect everyone will probably take the advantage by adopting any cryptocurrency. There is an expectation that adoption of bitcoin for remittances could potentially lower transaction costs compared to traditional remittance channels. There is chance of getting more Foreign Direct Investment (FDI) into El Salvador in the form of blockchain companies, ATM manufacturers and bitcoin miners.

Economy is at Risk

By adopting the Bitcoin as official currency, El Salvador puts the nation’s $26 billion economy at risk. There is huge price volatility exists for cryptocurrecy in crypto market. If the bitcoin price is crashed that would cause a liquidity crisis in the country. IMF warned of the risks of using bitcoin for day-to-day transactions after El Salvador, which is in negotiations for additional funds from the crisis lender, approved the cryptocurrency's use.

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