BitMEX CEO: At least 5 countries will adopt BTC as legal tender by the end of next year, urgent need to address remittance fees and inflation issues

BitMEX CEO Alexander Höptner published an article last Wednesday, the 6th, about the adoption of cryptocurrencies, explaining why developing countries have a higher demand for cryptocurrencies than developed ones, and claiming that by the end of next year, at least five countries will accept Bitcoin as legal tender.

Remittances Account for a High Proportion of GDP

For developing countries where the primary export is human capital, citizens working abroad are attracted by higher wages in developed countries. After receiving their wages, they send money back to their families and children in their home countries to support their financial needs. In the case of El Salvador, which has already adopted Bitcoin as legal tender, remittances account for as much as 23% of GDP. According to a report by the World Bank, in 2020, $540 billion in remittances flowed into low- and middle-income countries.

"This money needs to find its way home, but the current remittance system charges people an average of 10% in fees, which is wrong and distressing," said Alexander Höptner.

Due to the high cost of remittances, the extremely low transaction fees of Bitcoin, and its 24/7 trading availability, it is natural for developing countries to be drawn to its adoption.

Pressure from Currency Inflation

Compared to developed countries, developing nations typically face higher inflation rates. The IMF predicts that in 2021, the inflation rate in developing countries will be around 5.4%, while in developed countries it will be around 3.6%. The financial systems in developing countries are not as robust as those in developed nations. If prices of essential goods rise too quickly, it could have a severe impact on people's lives and even cause panic. Using Turkey as an example, Alexander Höptner said:

This year, Turkey has seen an inflation rate well above 15%, leading to a surge in cryptocurrency adoption. However, the Turkish government quickly banned the use of cryptocurrencies in goods and services, further raising the inflation rate to 19.25%.

More Countries Will Follow El Salvador's Lead

Alexander Höptner believes that in the coming year, as El Salvador deals with and resolves issues related to adopting Bitcoin as legal tender, savvy politicians will consider whether to take a similar path. He also bluntly stated:

By the end of next year, at least five countries will accept Bitcoin as legal tender. And they are all developing countries.