Starting from 9th of June 2021 #Bitcoin is legal tender in #ElSalvador.
This has major world wide consequences and bellow are my takes on this.
- No country can tax profits from selling #Bitcoin as is no longer an “asset” but a currency.
Remember #XRP issues with this topic. The Federal Reserve is investigating Ripple company, accusing it of issuing illegal securities in the form of XRP.
This was a test case on crypto and easy to pursue because #XRP is linked to a legal entity registered in USA.
Bitcoin is no longer in the same situation as XRP because now has to be treated as an international currency.
- It is a mandatory requirement for businesses in El Salvador to accept Bitcoin as currency.
El Salvador will be a major spot for crypto development now.
All the players that develop retail crypto solutions will have to be there. It will be the perfect testing ground for their systems.
Yes it is hard to use BTC to pay for coffee, nobody wants to wait one hour to receive a confirmation or one day to obtain 6 confirmations. Probably BTC will be used only for ultimate settlement. There are several off chain schemas and implementations that can circumvent the issue of waiting for final confirmations.
- This is a terrible blow to all the #CBDCs (Central Bank Digital Currencies) announced, under investigation or already launched by the diverse central banks.
CBDCs suffer from lack of decentralization, they are issued by the central bank and only chosen approved players (banks) can act as member nodes of the chain.
CBDCs suffer from lack of privacy , by design the tokens are made to have full perpetual audit data attached to them. This is information so detailed that does not exist in this moment in the current cash and electronic money mix.
CBDCs stability is influenced by political decisions of the state not by the market. The central banks can simply start minting new tokens as they wish so inflation of value is almost certain.
None of the above issues apply to Bitcoin.
There are even worse CBDCs out there like China’s CBDC where government can revoke your tokens at any time based on some political decision. Jack Ma can be poor with a click of the mouse of some CCP party leader.
Exciting times are coming.