May lead El Salvador announces Bitcoin as legal tender This poses challenges for the state and cryptocurrency, according to investment bank analyst JPMorgan, whose bitcoin trading volumes exceed $ 40 billion to $ 50 billion per day, which calls into question the ability to implement these schemes. Most trades take place and are absorbed through major exchanges.
Bloomberg commented that a large portion of Bitcoin is locked in non-liquid materials and that more than 90% of their holdings have not been circulated for more than a year. That’s it. Al Arabiya.net “.
“The daily payment activity in El Salvador represents about 4% of recent transactions in the Bitcoin blockchain, with more than 1% of the total cryptocurrency value exchanged between wallets last year.” The presence of liquidity and the nature of the volume are likely to significantly limit its potential as a medium of exchange. ”
El Salvador’s President Najib Bokela has begun discussions on the benefits and potential repercussions of making Bitcoin the currency of the country.
Buckley argued that Bitcoin would help increase financial inclusion, increase the low bank infiltration rate in El Salvador, and reduce the cost of remittances. But the International Monetary Fund, which is discussing its credit program with El Salvador, is among those who have questioned this logic.
While many of Bitcoin’s spokespersons claim that it is a good value addition, its usefulness as a payment system is limited.
“Bitcoin is by far the worst payment system ever discovered,” said William Quigley, co-founder of Stablecoin. He added that almost any token is better than Bitcoin as a payment system.
Other challenges that JPMorgan sees in connection with El Salvador’s adoption of Bitcoin as a legal currency are reflected in recent surveys, which indicate widespread skepticism and reluctance to use Bitcoin as a medium of exchange.
The high volatility of Bitcoin in the monetary system along with the official dollarisation is a major challenge.