Pressure On Bitcoin Network & Monetary Authorities Because Of Bitcoin Legalization In El Salvador : JPMorgan
Economic experts of JPMorgan stated that the Bitcoin network will face 4% extra transaction load in comparison with current transaction activities. And also the adoption of Bitcoin as a legal tender may lead into big problems for Monetary Authorities.
El Salvador’s president’s decision to adopt bitcoin as a legal currency is really appreciated and praised by many experts, but there are many authorities & institutions which are not supporting Nayib Bukele and also they are trolling for their decision regarding Bitcoin.
In the very starting World Bank refused to support El Salvador for Financial infrastructure development in Bitcoin use and then many politicians criticized for his decision.
JPMorgan, American megabank’s economic expert, shared their options recently about the Legalization of Bitcoin by El Salvador’ president.
According to Steve Palacio, Expert of JPMorgan, El Salvador’s decision may put a big pressure on the Bitcoin network.
According to Steve, almost 90% of the transactions of Bitcoin happen on Trading exchange and the rest of them are wallet to wallet.
But now if El Salvador’s citizens will use Bitcoin at such a huge level then it will result in pressure for the Bitcoin network. It will result in 1% more pressure in comparison with last year transaction activity and 4% more strain in comparison with current time transactions activities.
And also he pointed out the impact of adoption of Bitcoin on fiat value.
They said if people will have full support for Bitcoin as legal currency then most of the people will convert their funds into Bitcoin and that will lead to a big problem for Monetary Authorities to sustain the value of dollar at global level.
“cannibalize onshore dollar liquidity” and eventually introduce fiscal and balance of payments risk”
Well here probably, JP Morgan experts don’t know about the situation of El Salvador because Salvadorians don’t have their own legal currency. They are only using Dollar for their needs and now they are using Bitcoin alongside Dollar for their needs. Here El Salvador’s Authorities are just adopting a mode of payment and they are ready to face all possible.