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- “My prediction is that by the end of next year, we will have at least five countries that will accept Bitcoin as legal tender. All of them will be developing countries,” wrote the CEO of BitMEX.
- High inflation rates, high transfer fees, and political incentives could spur developing countries to follow El Salvador’s steps and adopt BTC as legal tender next year.
- In Alexander Höptner’s opinion, the mainstream media’s criticism of the Central American country’s Bitcoin law is unfair.
El Salvador’s recent move to make bitcoin legal tender alongside the dollar has drawn criticism around the world, but mainly among mainstream media, such as the Financial Time and the Wall Street newspaper, and renowned financial institutions, including the International Monetary Fund (IMF) and the World Bank.
Alexander Höptner, CEO of the bitcoin exchange BitMEX, explained in a blog post on October 6 that the immediate backlash triggered by the Bitcoin law in the Central American country reflects the opinion of those who benefit from the status quo.
“What critics fail to recognize is that developing countries like El Salvador are leading the world in embracing decentralized digital currencies and payments,” Höptner wrote. “They have had decades to analyze how the global financial system works – and doesn’t – for their people. They recognize their powerlessness to influence monetary policy decisions that can have serious consequences for their citizens.”
Höptner went on to explain that making bitcoin legal tender like El Salvador did in September does not mean a complete withdrawal from the established financial system. Instead, it means countries are looking for alternatives to better benefit their people and their economy.
“They’re not completely withdrawing from the status quo of the monetary system (El Salvador still retains its other legal tender, the US dollar), but they choose to try something new. It deserves praise, not derision. “, did he declare.
Developing countries generally face a very different economic reality from that of developed countries. Therefore, the status quo might not be enough – the alternatives have the potential to provide a better quality of life for citizens, thus improving the country as a whole. For this reason, the head of BitMEX predicts that more countries will follow in El Salvador’s footsteps and bet on the alternative.
“My prediction is that by the end of next year we will have at least five countries that will accept Bitcoin as legal tender,” Höptner explained. “All will be developing countries.”
High fees in remittances that reduce the actual amount of money transferred, recurring high inflation rates, and political incentives could create the perfect environment for Bitcoin adoption to accelerate further.
Low- and middle-income countries received about $ 540 billion in remittances in 2020, nearly 75% of total global remittances, according to the World Bank. The IMF has forecast that developing countries will experience more than double the inflation rates that developed economies will experience this year.
“Faced with an inherently unequal financial system, those who have the most to lose by pursuing the status quo are acting in their own best interests to explore alternative options like Bitcoin. It would be wrong – and hypocritical – to thumb their noses at them while continuing to benefit from this same unequal system. “
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