San Salvador, El Salvador, September 3 2021, The bill passed by the El Salvador government in June of 2021 comes into effect from September, and the entire nation is now preparing for a new form of the exchange system, which is added with Bitcoin. The people in El Salvador can now use Bitcoin like their local currency, and the same will be accepted by the banks, businesses, and other financial institutions. It’s a welcome move aimed at enhancing financial inclusion and exposing the mobile-first population of the country to a new form of exchanging value. It is left to be seen how well the people will take this transition, and is this going to impact Bitcoin’s functionality in any way?
El Salvador’s Journey With Bitcoin at the Front Seat
With Bitcoin being used in daily life transactions, the DeFi businesses, including BlockBank and others, stand to receive recognition from banks and other financial institutions. This move will legitimize DeFi in the country and open the bank’s door to the companies working in the domain. The other economies looking to follow suit will get an excellent example of the real-time efficacy of Bitcoin or any other cryptocurrency merging with the fiat money of the country.
With effective transitioning, the banks will have to set up measures for converting BTC to USD and vice versa. Just as the banks are intermediaries for the fiat currency, they will help regularize Bitcoin into the country’s financial infrastructure along with operating wallets and become a transaction intermediary.
Bitcoin merging into El Salvador’s financial system means that people can get easy and safe access to a cryptocurrency. As everyone has a mobile, they can easily get on board with the move and use Bitcoin as a regular currency. It will help them ease into the system of taking microloans and protect themselves from paying predatory interest rates paid to loan sharks. It will further expose the country’s people to use and leverage smart contracts and eventually create a reliable system based on trust.
Until the integration of Bitcoin into the El Salvadoran economy, the country’s financial stability is dependent on the USD. The country’s economy has gained stability with pegging to USD, but it has also given the entire system a centralized notion. Bringing Bitcoin into the system will ease the centralization pressure and help the economy benefit from a decentralized system.
The people of El Salvador are about to start engaging and interacting with a new form of exchanging value. The workings of Bitcoin in the country will help other nations learn from this experiment and observe a real-life example of a cryptocurrency’s impact on a financial system.
About Block Bank
Block Bank is working on a system to streamline the crypto integration with the mobile and create a better banking experience powered by artificial intelligence. The Block Bank all-in-one app will integrate every type of cryptocurrency and simplify the user’s experience and interaction. It is a merger of decentralized finance and centralized finance reinforced with security and privacy, empowering the users financially.
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