El Salvador has officially recognized Bitcoin as a legal tender this year. This transition has made a huge impression on the media. Many analysts consider this to be a great alternative to the crypto exodus imposed by the government of China. For the most part, the developed economies in Asia like China, India, Turkey, and others are planning to put the case of cryptocurrencies on the back burner.
However, the CEO of a major cryptocurrency exchange BitMEX seems to disagree with the idea. Speaking to the media, Alex Hoeptner claimed that before the end of next year, at least 5 more developing nations are going to recognize Bitcoin as a legal tender. BitMEX was launched in 2014; it is currently owned by HDR Trading Limited. The main office of this crypto exchange is based in Seychelles, East Africa.
Bitcoin can Save Developing Countries from Major Economic Issues
CEO of BitMEX, Hoeptner, uses the example of El Salvador to present a strong case for Bitcoin adoption. He explained that Bitcoin has the potential to provide a financial safety net for many developing economies for several reasons. The president of El Salvador, Nayib Bukele, told the media that the Bitcoin adoption would allow the country to retain a bigger portion of remittance.
In the same manner, Hoeptner also claims that 3 main reasons developing countries can benefit from the flagship cryptocurrency. According to World Bank estimates, low and middle-level developing countries depend as much as 75% on their GDP contribution. However, third-party service providers such as Western Union and others charge as much as 10% of the total income for this purpose. Therefore, the use of Bitcoin can discard the commission and allow people to make faster transfers and save transaction costs by 90%.
The CEO of BitMEX told the media that there are more than one reasons for the developing countries to adopt Bitcoin as a legal tender. He quoted the statistics from Turkey that indicate that the citizens started to take an additional interest in cryptocurrency when the inflation rates rose to 15% in 2020.
As per a survey conducted by International Monetary Fund (IMF), the expected rate of inflation for developed countries after 2021 is 2.4%. However, for developing countries, this rate is as high as 5.4%. He further added that the government of Turkey took prompt action to stop the businesses to start accepting Bitcoin and other crypto variants as a mode of payment. Hoeptner also believes that people can take refuge in digital assets as a store of value.