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Earlier this month on 8th September, El Salvador a country in Central America became the first country in the world to adopt bitcoin as it’s national legal tender. The Salvadoran government took this move to ensure monetary stability that the country’s adopted national currency the US Dollar had historically struggled to deliver. Though bitcoin’s volatility doesn’t favour it as a legal tender, The President of El Salvador, Nayib Bukele backed it as a move that would salvage their economic problems.
The Salvadoran government installed over 200 Bitcoin ATMs. This made El Salvador become the third largest network of crypto ATMs across the world after USA and Canada.

Other Countries that have considered Bitcoin adoption.
Owing to the flexibility of bitcoin and other cryptocurrencies. More countries across the globe are embracing the new way of making transactions.
In America, the latest countries to legalize and regulate cryptocurrencies are Panama,Cuba,Ecuador,Paraguay,Brazil,Mexico, Argentina and others.
In Europe and Asia they include Ukraine, Vietnam, Iran, India, Pakistan and others.
In Africa they include Nigeria,Kenya,South Africa,Zimbabwe, Tanzania among others. Despite hesitation from governments in Africa to accept crypto, the adoption is quickly picking up. According to Chainalysis, the African crypto market has grown by 12 times in terms of the value received in the past one year.

Why are countries adopting bitcoin and other cryptocurrencies?

1. To increase financial inclusion: Given that a good number of their citizens are unbanked, cryptocurrencies provide a flexible alternative way to move money among the individuals. This would accommodate more citizens in the financial space.

2. To attract more investors: adoption of bitcoin and other cryptocurrencies opens new avenues for tech entrepreneurs and investors to venture into. Statistics have shown that more tech investors would prefer to do business in a country where there’s ease of making transactions. Cryptocurrencies provide this flexibility.

3. To improve their countries GDP: cryptocurrencies provide a means for citizens working abroad an auspicious way of sending money home without paying the high transaction costs charged by banks. The saved transaction costs would increase the volume of money they remit as a result improving the GDP.

4. To provide a safe-haven for storing wealth and assets: with the recent high inflation rates experienced across the globe. The value of fiat currencies have drastically depreciated. The amount of goods a single dollar could buy few years ago has dwindled and one has to cough few more dollars to buy the same basket of goods. Cryptocurrencies act as a hedge against inflation brought about by unsustainable fiscal and monetary policies.
It provides an avenue for citizens to store their wealth since the value of crypto increases with time as opposed to the fiat currencies whose value depreciate with time.
A perfect example is the comparison between Bitcoin and Gold. As of 2008 when bitcoin was unveiled, the price of gold was around $1000 per a 20 ounce. At that time the price of 1 BTC was well below $1. That means 1BTC wouldn’t purchase a fraction of gold in the market. As of today 1BTC can purchase up to 21 20ounce-pieces of the same gold! So those who stuck with gold and avoided BTC have only managed to double their wealth.

I hope you enjoyed the article. Make sure to check our other articles as we give you the insights in the digital economy.

1. Cointelegraph
2. Coindesk

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