Cryptocurrencies Legalization: El Salvador Chasing Bitcoin


During an ordinary day at the computer, we get hundreds of ads suggesting us to invest on Bitcoins (BTC) or similar cryptocurrencies, right? But what are cryptocurrencies? Are they legal or is there a cryptocurrencies legalization process underway?

Cryptocurrencies Legalization
Bitcoin – Credit: Bermix Studio

The full explanation is indeed very complicated but we can simplify it enough to make it understandable to everyone. Knowledge is power and simplicity is our friend in this war for valuable information.

A Bitcoin is a unit of a particular virtual coin that was first invented in 2008 by a person or a group of people who defined themselves as Satoshi Nakamoto. This name is probably a pseudonymous and the identity of the genius behind the operation remains still unknown.

Bitcoins were the first digital currency to be created and are now the most valuable indeed. Note that one-unit values about 40.000 USD today (16 June 2021) and the coin is very volatile since dramatic fluctuations happen every day due to a multitude of factors. Even if Bitcoins are the most famous, there are thousands of other digital currencies out there such as Litecoin, Dogecoin, Ethereum, etc.

These other coins are called altcoins (alternative cryptocurrencies) and some of them, the ones which have the most volatile values, are commonly often only “high-risk speculative experiments.”

Why using cryptocurrencies?

Our world is getting very unstable at many levels and of course the financial one is no exception. The idea of a new tender based on the internet technologies and especially on the blockchain is of course a very interesting opportunity since its traffic is not regulated and controlled mainstream banks, yet.

Deciding to invest in one or the other is very difficult and there are few things to know before sinking in very risky speculations. The following video may help you to understand some of the very basics of blockchain and how digital currencies work.

The question we shall post to ourselves is: are cryptocurrencies an ethical way of investing? Should every Nation initiate a cryptocurrencies legalization process? Should Cryptocurrencies legalization process be started only for some cryptocurrencies or for all?

El Salvador’s cryptocurrencies legalization process.

The benefits of regularisation of BTCs.

El Salvador is the first Country to legalize Bitcoin for most transactions. This is a very important historical event since it regards finance and politics at an international level. The local dynamics is only a small part of the game since the example of the first to do something always means that there will be a second and a third one.

The choice of legalizing the new tender means that in the Country citizens will use both the original currency (USD) along with Bitcoin for regular transactions.

Remittances and migrants: A very important factor that certainly contributed to the new legal tender decision is the large quantity of remittances that get sent daily to the Country. Normally, remittances are small or medium amounts of money that get sent by migrants leaving their home Country, back to their families.

El Salvador counts at least 10 million citizens abroad and the virtual totality of the sends regular amounts of currency to the homeland, but the banks obviously ask for a commission on these transactions while blockchain doesn’t. It is therefore very likely to witness a deep shift in the way these remittances return to El Salvador.

Financial analysts and world leaders are paying particular attention on the topic while most of the world remains unaware. Will this new legalization dynamics change our economy again? Forever?

Why El Salvador Bets Big On Bitcoin

CryptocurrenciesRisks for the future:

Currently a digital coin like bitcoin can count on a gigantic market cap of 605 billions. The crypto wallet users are raising daily and the new financial deals are most likely being signed in complete secrecy.

The potential of crypto is enormous but the risks may be even greater. Total market volatility, virtually uncontrolled financial transaction along with the possible malicious uses of the coins could cause a new era or chaos based in economics.

Another deep risk is that these currencies could fall (if not already so) under the control of international organized crime or secret society. At that point there would be no turning back, we have to be particularly clever and careful while facing this inevitable shift. Soon many countries will find a way to legalize these currencies and the risk of general clash is very high!

Andrea Silvestri

for Insider Release

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