- “My prediction is that by the end of next year, we will have at least five countries that will accept Bitcoin as a legal tender. They will all be developing countries,” wrote the CEO of Bitmax.
- High inflation rates, hefty remittance fees and political incentives could encourage developing countries to follow El Salvador’s move and accept the BTC as a legal tender next year.
- According to Alexander Haptner, mainstream media criticism of the Bitcoin law in the Central American country is unfair.
El Salvador’s recent move has sparked some worldwide criticism for legalizing Bitcoin as well as the dollar, but mainly in mainstream media, such as Financial times And The Wall Street Journal, And well-known financial institutions, including the International Monetary Fund (IMF) and the World Bank.
Alexander Haptner, CEO of the Bitcoin exchange Bitmax, explained in a blog post in October that there was an immediate response to the Bitcoin law in Central American countries, reflecting the views 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 decentralized digital currencies and payments,” Haptner wrote. “It has taken them decades to analyze how the global financial system works – and doesn’t work – for their populations. They acknowledge their inability to influence policy decisions that could have serious consequences for their citizens.”
Haptner explained that making Bitcoin a legal tender, like El Salvador in September, does not mean the complete removal of the established financial system. Instead, it means countries are looking for alternatives to better benefit their populations and economies.
“They are not completely removing the financial system from its stagnation (El Salvador still holds its other legal currencies, the US dollar), but they are trying to do something new. It demands praise, not ridicule.”
Developing countries usually face an economic reality that is very different from developed countries. As a result, stability may not be enough – The alternatives have improved living conditions for the citizens, which in turn improves the country as a whole. For that reason, the head of Bitmax has predicted that more countries will follow El Salvador’s footsteps and bet on alternatives.
“My prediction is that by the end of next year, we will have at least five countries that will accept Bitcoin as a legal tender,” Haptner shared. “They will all be developing countries.”
High fees on remittance flows that reduce the actual amount of money transferred, recurring high inflation rates and political incentives can create a more conducive environment for bitcoin acceptance.
According to the World Bank, low- and middle-income countries received about 40 5.40 billion in remittances in 2020, accounting for about 5% of total global remittances. The IMF predicts that developing countries will experience more than double the rate of inflation in developed economies this year.
“Faced with an inherently unequal financial system, those who have lost the most by maintaining stability are working in their interests to look for alternatives like Bitcoin.