Some controversy has erupted over El Salvador’s decision that bitcoin is now legal in its territory.
While local residents expressed dissatisfaction with the move, prominent names like Michael Saylor described it as “extraordinary” as well as “world-shaking.”
It is unclear if this will be the start of a successful financial revolution or another attempt by a top political figure to gain power and support.
Alexander Hoptner, Chief Executive Officer at BitMEX, a cryptocurrency derivatives exchange, has recently written a blog post in which he compared himself to others who think this could be a very beneficial initiative.
According to the executive, he was not surprised that the heads of the current financial system (World Bank, Moody’s Investors Service and El Salvador) have attacked El Salvador more than they did El Salvador. Hoptner said that critics don’t realize that El Salvador and other developing countries are the leaders in adopting decentralized digital currencies, payments, and that this is what Hoptner also stated.
He also predicted that at most five developing countries would participate in the experiment by 2022. Here are the arguments.
Many people from El Salvador send money abroad to provide better living conditions for their families back home. Hoptner says that bitcoin, with its fast transactions and negligible fees, could be the solution to the problem.
BitMEX CEO John McMahon has made a comparison between digital assets and traditional financial services before. He stated that the advancements in crypto are occurring at a faster pace than traditional finance in a recent interview with CryptoPotato.
“What we have seen in the traditional financial industry over the past 30 years has happened in two years in the crypto industry.”
Alexander Hoptner is Bitmex CEO. Image by: RYT9
Hoptner then cited the possibility of an increase in inflation following the COVID-19 pandemic. It is obvious that developed countries would be more affected than those in advanced economies. People often look for alternatives to fiat currency when inflation is threatening the financial system. BitMEX CEO, pointing out Turkey, provided proof of that assertion.
Crypto adoption soared as Turkey’s inflation rose to well over 15% this year. Turkey quickly responded by banning crypto-based goods and services. However, inflation now stands at 19.25 percent.
Other prominent figures also supported the idea that primary cryptocurrency could be an effective hedge against economic crises. Dawn Fitzpatrick and Paul Tudor Jones III, a billionaire, believe that bitcoin’s maximum limit of 21 million coins is the best tool against central banks’ recent mass printing.
Bitcoin is more than a digital currency. It’s also a technology, an asset store, and, according to many, a symbol of the future financial system. BitMEX CEO said that politicians will be interested in presenting themselves as “progressive and populist” if they make it an official payment method.
Hoptner, despite being a supporter for such an initiative, warned that high-ranking politicians may increase their popularity due to bitcoin and not what they have done throughout their careers.
“This will not be a love note to President Bukele, El Salvador, who is putting his political future at stake by the success of this policy. While I agree with the policy, I believe that too much credit should not be given to individuals in cryptospace.
He then stated that if a politician plays a significant part in the adoption BTC, it might automatically harm the image of the most valuable digital asset.
Marla Brooks – Financial Analysis
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