US Bank Stands Out, Acknowledges El Salvador's Bitcoin Strategy Holds Potential Advantages

El Salvador's move to recognize Bitcoin as legal tender has faced skepticism from mainstream markets, but Bank of America has stood out by analyzing several potential benefits of El Salvador's Bitcoin strategy.

According to a report by Cointelegraph, the Bank of America has pointed out the first benefit of El Salvador's Bitcoin strategy as follows: "Over 70% of adults in El Salvador do not have bank accounts, and the democratization of electronic payments through Bitcoin has a progressive significance."

The Bank of America, with 5,600 branches in over 150 countries worldwide, is the second largest commercial bank in the United States after JPMorgan Chase, and one of the largest financial institutions in El Salvador.

Analysts at the bank stated that the second benefit of El Salvador's decision to recognize Bitcoin as legal tender is the simplification of remittances. Many young Salvadorans work abroad, and remittance fees account for 24% of El Salvador's GDP.

"Compared to traditional remittance methods, using Bitcoin for remittances can reduce transaction costs. The sender can convert dollars to Bitcoin, which can then be converted back to dollars domestically by the recipient."

Since El Salvador's President announced in June that Nayib Bukele would accept Bitcoin as legal tender, the move has faced continuous scrutiny and criticism from global financial institutions, including the International Monetary Fund and the Economic Commission for Latin America and the Caribbean of the United Nations.

JPMorgan Chase believes that El Salvador's Bitcoin strategy may add additional pressure to the country's limited internet capacity, and rating agency Moody's has downgraded El Salvador's credit rating as a result.

Over half of the population in El Salvador is skeptical of using Bitcoin as legal tender.

While El Salvador's announcement of the Bitcoin strategy initially sparked enthusiasm in other countries in Central and South America to follow suit, as of now, no other country has successfully followed El Salvador's lead.

This article is authorized to be reproduced from Horizon Next News Network.