Is Bitcoin truly able to replace fiat currencies as legal tender?
There’s been little sunlight this crypto winter, so it may seem odd to present the “Bitcoin as legal tender” argument again. That is, will or should any country — other than El Salvador and the Central African Republic , which have already done so — declare Bitcoin an official national currency?
“There are very good economic reasons why most countries would not want to adopt cryptocurrencies like BTC as their local scrip,” James Angel, associate professor at Georgetown University’s McDonough School of Business, told Cointelegraph. “In short, they don’t want to lose the profits from printing their own money or the economic control over the economy that fiat currencies provide.”
“Bitcoin was made for the Global South,” Ray Youssef, co-founder and CEO of Paxful — and a founder of the Built With Bitcoin Foundation — told Cointelegraph. “In the West, a lot of attention is paid toward the suspected volatility of Bitcoin. That’s because the world runs on the dollar and the West is shielded from global inflation. Right now, Turkey has an inflation rate of over 50%, and Nigeria has an inflation rate of over 20% — in these economies, Bitcoin is a strong bet.
Rahman acknowledged that “there are benefits such as seeing a reduction in transaction fees for financial transactions. If there is a weak traditional banking system or lack of trust, then cryptocurrency undoubtedly can provide an alternative means of payment.” Bitcoin remains questionable as legal tender because it does little to quell the so-called “flight-to-safety” phenomenon, wherein the demand for money shifts violently with sudden changes in consumer or business sentiment, Andolfatto explained.
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