The news about El Salvador making Bitcoin legal tender last semester spread like a bushfire across the market last year and it is still a big topic in the crypto and financial industries six months after legalisation. However, there have been mixed reactions regarding this move, with many analysts feeling it was ill-timed.
El Salvador is now facing numerous challenges after making the decision to legalise Bitcoin. The digital currency has not been circulating as projected and the majority of the population still feels that accepting BTC payments might expose them to financial losses due to its instability.
We cannot tell accurately if after months of adaptation to this reality, El Salvador citizens are very cautious about transacting Bitcoin. The biggest problem is the mass adoption of Bitcoin, as the success of crypto-related technology relies on two major factors: the availability of smartphones and access to the Internet.
For a country with a low smartphone and internet penetration, the mass population may face many challenges to access this new technology. On top of that, lack of knowledge about cryptocurrency especially in elderly and illiterate groups, makes it hard to make an even progress towards digital currency implementation.
El Salvador government for taking the bold step to legalise Bitcoin was a big milestone for blockchain technology, and the country is gathering efforts to decentralise its financial services. However, local authorities must first address the aforementioned and invest on strategies to educate the population on digital currency to make sure they are prepared to handle their financial independence with peer-to-peer platforms.
With Bitcoin being officially accepted in the country, it is expected that El Salvador's economy has all the necessary features to keep growing in value in the coming years. To guarantee the success of this new era, it is essential to provide infrastructure to enable the population to transact the cryptocurrency without unnecessary costs. Infrastructures does not have to be necessarily rely solely on smartphones and high-speed Internet because, since the market has been progressing fastly since El Salvador’s official announcements and many other solutions are now available to be explored as a bridge between users and crypto-related technology. KamPay’s KamMobile, for instance, enables crypto transaction crypto with a simple mobile gadget that is not fully equipped like a smartphone is.
El Salvador was the first country to take this step towards massive crypto adoption, but we can no longer say that no other nation has attempted. Recently, the Central African Republic also announced the legalization of Bitcoin and was the first African country to seal this deal. The bottom line is that a lot needs to be done in both countries before legalising any other cryptocurrencies and making further movements to keep investing in a crypto-related reality. We will keep an eye out for see how other countries will followe the lead and make adjustments to insert crypto-related technology into their industries and economies and hope to see effective measures taken to overcome the challenges that may hamper the crypto revolution.
Yigal Weinberger has worked as a lead Data Scientist with some of the biggest security companies in the world, and has been a programmer, hacker and self-proclaimed data geek since he was 11.