SAN SALVADOR, EL SALVADOR / ACCESSWIRE / September 3, 2021 / The bill passed by the Salvadoran government in June 2021 comes into force from September, and the entire country is now preparing for a new form of trading system, which is added with Bitcoin. Residents of El Salvador can now use Bitcoin as their local currency, and the same will be accepted by banks, businesses, and other financial institutions. It is a welcome initiative aimed at improving financial inclusion and exposing the country’s mobile population to a new form of value exchange. It remains to be seen how far people will take this transition, and will it impact Bitcoin’s functionality in any way?
El Salvador’s trip with Bitcoin in the front seat
Bitcoin being used in day to day transactions, DeFi businesses including BlockBank and others, should be recognized by banks and other financial institutions. This decision will legitimize DeFi in the country and open the door to the bank for companies working in the field. Other economies looking to follow suit will get a prime example of the real-time efficiency of Bitcoin or any other cryptocurrency merging with the country’s fiat currency.
With an effective transition, banks will need to put in place measures to convert BTC to USD and vice versa. Just as banks are intermediaries for fiat currency, they will help regularize Bitcoin in the country’s financial infrastructure as well as operating wallets and become a transaction intermediary.
The merger of Bitcoin into El Salvador’s financial system means that people can easily and securely access cryptocurrency. Since everyone has a mobile, they can easily get on board with the move and use Bitcoin as their regular currency. This will help them integrate easily into the microcredit system and protect themselves from predatory interest rates paid to loan sharks. This will further expose the people of the country to use and benefit from smart contracts and eventually create a reliable system based on trust.
Until the integration of Bitcoin into the Salvadoran economy, the country’s financial stability depends on the USD. The country’s economy gained stability with pegging to the USD, but it also gave the whole system a centralized notion. Integrating Bitcoin into the system will ease the pressure of centralization 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 value exchange. How Bitcoin works in the country will help other countries learn from this experience and see a real-world example of how cryptocurrency impacts a financial system.
About the block bank
Block bank is working on a system to streamline the integration of crypto with mobile and create a better banking experience powered by artificial intelligence. The all-in-one Block Bank app will integrate all types of cryptocurrency and simplify user experience and interaction. It is a merger of decentralized finance and centralized finance enhanced by security and privacy, empowering users financially.
THE SOURCE: BlockBank
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