Bank of Spain analyzed the case of El Salvador and bitcoin
The Spanish institution prepared an analysis on the adoption of cryptocurrency within the economy of the Central American country
The Bank of Spain prepared an analysis on the adoption of bitcoin as legal tender in El Salvador, highlighting the low financial inclusion of the population as one of the challenges the country faces in this project.
Specifically, the analysis entitled “The role of crypto assets as legal tender: the example of El Salvador”, draws attention to the central role that has been attributed to Salvadoran banks in the functioning of the bitcoin ecosystem “precisely when El Salvador is one of the countries with the lowest financial inclusion rates in the world.“
In this sense, he recalls that the country chaired by Nayib Bukele, promoter of this initiative, is the 15th country below in the Global Findex, which measures the financial inclusion of the countries, from the World Bank. A circumstance that results from “the scarce level of financial education of the population, as well as their lack of trust in institutions, in public bodies and, in general, in the entire economic and financial sector, due to the high rates of perceived corruption.”
Thus, he points out that the market’s ability to develop and satisfy the needs of users, as well as to design innovative products around crypto assets, is “unknown”.
On the other hand, the Bank of Spain indicates the overcoming of certain technical barriers as another challenge, since the population of El Salvador that has Internet access is around 50 %, while the market share of smartphones does not reach 40 %, so that the country is “at the bottom” of the Central American countries in terms of the level of digital training.
“It remains to be seen to what extent the public assistance programs designed by the Government and other actions aimed at accelerating the migration of users to the digital environment achieve or not the expected success”, says the article prepared by Sergio Gorjón.
The Bank of Spain estimates that, ultimately, it could be necessary to affect a possible loss on citizens “in the form of taxes.”
K. Tovar
Source: Europapress
