Three Reasons Five Countries Could Legalize Bitcoin

Some controversy has erupted over El Salvador’s decision that bitcoin is now legal in its territory.

While locals were unhappy, prominent people such as Michael Saylor called the move “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.

Enable Remittance

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 “much quicker pace”

“What we’ve seen happen in the traditional financial world in the past 30 years happened in 2 years [in the crypto industry].”

Hedge Inflation

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.

“As inflation climbed well above 15 percent this year in Turkey, crypto adoption surged. Turkey responded by quickly banning the use of crypto for goods and services, but inflation is now 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.

Social Politics

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 won’t be a love letter to President Bukele of El Salvador, who is staking his political future on the successful rollout of this policy. I support the policy, of course, but I think there’s long-term risk in giving too much credit to individuals in the crypto space.”

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.