In September last year, El Salvador became the first country to introduce Bitcoin as a legal tender, which brought the world to the question ‘Can Bitcoin be used as a replacement for money?’ and ‘Why only Bitcoin? Howto buy bitcoin with credit card?
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Introduction
The introduction of Bitcoin in 2008 to develop new electronic cash that can be used as a form of payment and can avoid traditional financial institutions like banks has recently evolved into a type of trading or investing for the younger generation. After its first launch, it grew exponentially, eventually reaching a point where it was deemed to have an enduring value, and discussions about making it a legal tender began. The first cryptocurrency with such strong momentum and a following among young people was Bitcoin, which caused discussions to center solely on it where to buybitcoin in nigeria.
Bitcoin Serving as Legal Tender
As of now, Bitcoin is recognized as legal tender in El Salvador and the Central African Republic. Why has it been used to replace fiat currency since it is such a volatile asset with an unstable value?
The lack of a financial institution or regulator is one of the main benefits of cryptocurrencies over fiat money, which offers them a substantial advantage in populations where a sizeable portion does not have a bank account. In these populations, this system can function effectively. Similar reasons motivated President Bukele of El Salvador to make significant changes to the country’s finances: 70% of the population lacked a bank account.
Another factor was the conflict between Russia and Ukraine, which made it impossible for many countries, especially Moscow’s allies, to import oil because they could no longer conduct business in US dollars. This supported the premise and made it viable to trade oil for cryptocurrency since they are accessible to everyone worldwide. With more than 106 million owners and traders of Bitcoin and more than 1 billion users worldwide, cryptocurrencies have the potential to replace fiat money as the global standard of exchange. Governments, however, are still failing to see the enormous potential, which may be because of the following elements that pose a threat to the governments:
Reasons for not accepting Bitcoin as a Legal Money
More than 80% of cryptocurrency traders acknowledged that it’s difficult for cryptocurrencies to be at a steady value, according to a global economic poll on the volatility of cryptocurrencies. Its value is susceptible to fabricated debates, making it difficult for any government to adopt it as legal cash. Due to the lack of oversight by any competent regulatory body, it is a desirable location for engaging in criminal activities, including money laundering and financing terrorism.
Also, bitcoin mining uses a lot of energy and produces a lot of greenhouse gases, which is why it negatively influences the environment.
These factors have led to government’s worldwide avoiding cryptocurrencies and many nations, including India, creating their own digital currencies.
Conclusion
Bitcoin has lately become legal tender in several nations, like El Salvador, but only in some others. In the end, several variables, like governmental regulation, public acceptance, and the stability of the cryptocurrency market, will determine whether or notBitcoin should be considered legal cash.