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Bank of America Sees Benefits of Accepting BTC as a Means of Payment in El Salvador

The second largest US bank, Bank of America (BoA), sees an advantage in El Salvador’s initiative to adopt bitcoin as a quality legal tender.

According to publications Diario El Salvador on Twitter, citing a report from BoA, one of the largest banking institutions in the United States, bank analysts acknowledge the opportunities bitcoin has to offer as legal tender to El Salvador.

BoA claims that the introduction of the world’s largest cryptocurrency into the economy of El Salvador could potentially reduce the cost of remittances, which account for nearly a quarter of the country’s gross domestic product. In turn, this could seriously increase the real income of the Salvadorans.

Providing financial services to people without access to banking services is another benefit of Bitcoin adoption in El Salvador. According to the latest data, approximately 70% of El Salvadorians are unable to open a bank account.

According to the bank’s analysts, El Salvador could attract foreign direct investment flows by becoming a major mining center for BTC, similar to Iceland. According to another BoA ​​report, government cryptocurrencies could form “a much more efficient payment system than cash” and also reduce the popularity of stablecoins.

In June, El Salvador’s President Nayyib Bukele recognized bitcoin as legal tender in the country. However, the World Bank, IMF and other large organizations were critical of this move. Thus, the World Bank refused to help El Salvador to integrate bitcoin into the financial system.

According to a recent report by JPMorgan, the use of bitcoin in the El Salvadorian economy is facing obstacles, which indicate possible “restrictions” on the use of the cryptoasset as a means of payment.

That being said, the swift adoption of a law recognizing bitcoin as legal tender in El Salvador was poorly received by some citizens. In July, protests against bitcoin were held in the country.


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