Everyone holding Bitcoin May dream that one day it will become a legal tender. Well, the dream is almost coming true. El Salvador is about to roll out Bitcoin as a legal tender on September 7th, 2021.
What is legal tender?
A legal tender is a currency form in which the court of law legalizes a currency as the country’s fiat currency.
Can Bitcoin become fiat currency?
Of course, it can! Only if you are willing to use it. As we already experienced, the Bitcoin price fluctuates in a much larger range which makes one party lose more than the other after the transaction.
Bitcoin as a debt-backed securities?
Can Bitcoin-backed debts? Of course and only if you want to! Your debt can be easily pay off if Bitcoin drops a lot of harder than ever if Bitcoin shot up to the moon!
Banks controlled wallets with KYC requirements
The banks are acting rather like crypto exchange platforms that convert Bitcoin into other fiat currencies and they may charge higher fees.
Paying with Bitcoin
Citizens may need to spend more money to pay for their products and services. Any transaction disputes may require no one but both parties to settle the transaction.
Bitcoin does not resolve social issues
El Salvador’s citizens do not benefit from adopting Bitcoin as legal tender. It did not have social equality but widening the wealth gap. It probably will not immediately improve their living conditions but requires them to purchase or own a smartphone in order to have a functional wallet.
In conclusion
Legal tender is good for certain digital currencies but not likely beneficial for everyone in terms of becoming fiat currency, particularly Bitcoin. There are better digital cryptocurrencies with lower transaction fees and fast networks. However, if social issues do not resolve, then cryptocurrency may be just another way for the government to control and monitor its citizens.