As per a report published last week, Bank of America (BOA)has outlined some potential benefits of adopting bitcoin as legal tender in El Salvador.
The analysts, including Latin American strategist Claudio Irigoyen, explained that “The market has been excessively pessimistic about it and is overlooking any argument in favor, even if those benefits are admittedly more uncertain.”
Firstly, the report details:
Bitcoin could be used as an intermediary for cross-border transfer … Using bitcoin for remittances could potentially reduce transaction costs compared to traditional remittance channels.
Bank of America Highlights Opportunities Bitcoin Brings to El Salvador as Legal Tender
Bank of America (BOA) outlined some potential benefits in El Salvador adopting bitcoin as legal tender in a report published last week.
The Bank of America analysts further noted that bitcoin’s volatility could be reduced if the conversions between BTC and dollars “happen automatically.”
Financial intermediaries would receive less in remittance fees, leaving recipients with more disposable income. However, Bank of America cautioned, “it is unclear how the bitcoin transaction fees would compare to traditional remittance channels.”
Secondly, the Bank of America report describes that “financial digitization” could be another benefit since “more than 70% of the adult population in El Salvador does not have a bank account.” The analysts emphasized, “democratizing access to electronic payments through bitcoin has a progressive touch.”
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