Is the deployment and purchase of Bitcoin in El Salvador the legacy of the president and the start of a “new world”?
September 7, 2021 (Investorideas.com Newswire) The CEO of a game-changing global financial services group said El Salvador becomes the first sovereign country in the world to officially buy Bitcoin and make cryptocurrency with legal tender the “start of a new world.”
Comments from Nigel Green, CEO and Founder of deVere Group, one of the world’s leading asset management and fintech organizations, come as the President of El Salvador confirmed that his government had bought 400 Bitcoin – worth around $ 21 million – just ahead of the U.S. country officially adopting the world’s most popular cryptocurrency as legal tender.
President Nayib Bukele said the government plans to “buy a lot more” as well.
The price of Bitcoin has risen following the announcements on Twitter to trade at around $ 52,680.
Mr Green says: âIt is almost universally recognized that the future of money is inevitably digital, in one form or another.
âEl Salvador has made history today by not only becoming the first country in the world to declare Bitcoin as legal tender, but also by becoming the first sovereign country to officially purchase it.
“I think this is a watershed moment in the evolution of digital currency and that it ushers in the start of a new world, as we can expect more countries, especially those whose economies are developing, follow the historical example of El Salvador. “
On Monday, deVere’s CEO acknowledged that the move entailed major risks, including that El Salvador could run out of dollars and that institutions, such as the IMF, viewed a country that has failed. adopted Bitcoin.
These risks prompted some Salvadorans last week to take to the streets to protest the adoption of Bitcoin as the official currency.
However, he laid out five reasons why he “welcomed” the Bitcoin decision.
âFirst of all, El Salvador chose to rely on a major ‘first world’ currency, the US dollar, to transact. But this reliance on another country’s currency has grown. Also comes with its own set of problems, often very costly.
âThe Salvadoran government cannot print its own currency and the economy cannot benefit from the US Federal Reserve’s money printing program. Therefore, El Salvador must either borrow or earn the dollars it needs.
âA stronger US dollar can have a crippling impact on emerging market economies like El Salvador.
âBy adopting cryptocurrency as legal tender, these countries then immediately have a currency that is not influenced by market conditions within their own economy, nor directly by the economy of another country.
âBitcoin operates globally and as such is largely impacted by broader global economic changes.
âSecond, central banks around the world have devalued their currencies, while the supply of Bitcoin is not only limited, but new coins are also mined at a decreasing rate. Salvadorians might therefore find that their new currency adopted theirs. gives more purchasing power when they buy abroad.
He went on to say, “Third, El Salvador’s adoption of Bitcoin could lower the cost of remittances, a major source of income for millions of people. Remittances would also be faster and easier, for example. compared to money transfer services or bank transfers, remittances are therefore likely to increase further.
âFourth, by diversifying the country’s dollar reserves into the cryptocurrency, there might be additional opportunities to earn yield, which means that the size of the reserves would increase.
“And fifth, El Salvador could benefit from significant foreign investment and inflows of capital, as digital asset organizations are likely to move to the Bitcoin-friendly country.”
On the deployment of legal tender and the massive purchase of Bitcoin from El Salvador, Green concludes: “The world is watching. This is probably the legacy of President Bukele in the making.”
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deVere Group is one of the world’s largest independent advisors of specialized global financial solutions for international, local affluent and high net worth clients. It has a network of more than 70 offices around the world, more than 80,000 clients and $ 12 billion in consulting.
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