{"id":9506,"date":"2021-07-13T01:54:23","date_gmt":"2021-07-13T01:54:23","guid":{"rendered":"https:\/\/www.buyucoin.com\/crypto-labs\/bitcoinization-of-el-salvador-jpmorgan-sees-no-tangible-economic-benefits-of-bitcoin-as-legal-tender\/"},"modified":"2021-07-13T01:54:23","modified_gmt":"2021-07-13T01:54:23","slug":"bitcoinization-of-el-salvador-jpmorgan-sees-no-tangible-economic-benefits-of-bitcoin-as-legal-tender","status":"publish","type":"post","link":"https:\/\/www.buyucoin.com\/crypto-labs\/bitcoinization-of-el-salvador-jpmorgan-sees-no-tangible-economic-benefits-of-bitcoin-as-legal-tender\/","title":{"rendered":"Bitcoinization of El Salvador: JPMorgan Sees No \u2018Tangible Economic Benefits\u2019 of Bitcoin as Legal Tender"},"content":{"rendered":"

JPMorgan has offered its view on the bitcoinization of El Salvador, the country which recently made bitcoin legal tender alongside the U.S. dollar. JPMorgan says, \u201cIt is difficult to see any tangible economic benefits associated with adopting bitcoin as a second form of legal tender.\u201d<\/strong><\/p>\n

JPMorgan on the Bitcoinization of El Salvador<\/h2>\n

JPMorgan & Chase\u2019s Latin American research team published a report titled \u201cThe Bitcoinization of El Salvador\u201d Thursday. El Salvador recently passed legislation<\/a> making bitcoin legal tender alongside the U.S. dollar.<\/p>\n

The JPMorgan analysts who authored the report wrote:<\/p>\n

It is difficult to see any tangible economic benefits associated with adopting bitcoin as a second form of legal tender.<\/p>\n

The report also points out that \u201cRecent surveys suggest widespread skepticism and hesitance of bitcoin as a medium of exchange \u2026 with extreme volatility posing a particularly acute challenge in a bimonetary system alongside official dollarization.\u201d<\/p>\n

JPMorgan noted that bitcoin\u2019s daily trading volumes often exceed $40 billion to $50 billion. However, a large portion of BTC<\/a> is locked up in illiquid entities, with more than 90% not changing hands in more than a year, the analysts explained, adding:<\/p>\n

Only a small fraction of circulating supply mobile and available for use in everyday transactions; daily payment activity in El Salvador would represent -4% of recent on-chain transaction volume and more than 1% of the total value of tokens which have been transferred between wallets in the past year.<\/p>\n

The JPMorgan report further adds that the illiquidity and nature of the volume are \u201cpotentially a significant limitation on its potential as a medium of exchange.\u201d<\/p>\n

However, many bitcoiners were quick to point out that the JPMorgan report does not mention the Lightning Network. Bitcoin advocate and Avanti Financial Group CEO Caitlin Long commented: \u201c\u2018The Bitcoinization of El Salvador\u2019 written by its Latam research team & it doesn\u2019t mention Lightning Network even once. It\u2019s clear they don\u2019t even understand the basics.\u201d Three major bitcoin wallets used in El Salvador utilize the Lightning Network: the government\u2019s upcoming Chivo wallet<\/a>, the Bitcoin Beach wallet, and Jack Mallers\u2019 Strike app.<\/p>\n

<\/p>\n

The report continues: \u201cA persistent imbalance on demand for BTC<\/a>\/USD conversions on the government platform (Chivo) could cannibalize onshore dollar liquidity and eventually introduce fiscal and balance of payments risk.\u201d<\/p>\n

In addition, the JPMorgan team believes that adopting bitcoin as legal tender \u201cmay imperil negotiations with the IMF\u201d for El Salvador, stating:<\/p>\n

We believe the Bitcoin Law is complicating talks around IMF aid which we continue to believe is necessary to put El Salvadorian debt on a more sustainable path.<\/p>\n

The International Monetary Fund (IMF) has warned<\/a> of \u201ca number of macroeconomic, financial, and legal issues\u201d surrounding El Salvador making bitcoin legal tender.<\/p>\n

What do you think about JPMorgan\u2019s view on the bitcoinization of El Salvador? Let us know in the comments section below.<\/strong><\/em><\/p>\n

Bitcoin News
\nFeatured, bitcoinization, El Salvador, JP Morgan, jpmorgan, jpmorgan bitcoin<\/p>\n","protected":false},"excerpt":{"rendered":"

JPMorgan has offered its view on the bitcoinization of El Salvador, the country which recently made bitcoin legal tender alongside the U.S. dollar. JPMorgan says, \u201cIt is difficult to see any tangible economic benefits associated with adopting bitcoin as a second form of legal tender.\u201d JPMorgan on the Bitcoinization of El Salvador JPMorgan & Chase\u2019s…<\/p>\n","protected":false},"author":0,"featured_media":9507,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[53,3],"tags":[],"class_list":["post-9506","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blockchain-news","category-coin-news"],"_links":{"self":[{"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/posts\/9506"}],"collection":[{"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/comments?post=9506"}],"version-history":[{"count":0,"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/posts\/9506\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/media\/9507"}],"wp:attachment":[{"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/media?parent=9506"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/categories?post=9506"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/tags?post=9506"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}