Alexander Höptner, the CEO of BitMEX crypto exchange foresees that five developing countries adopt Bitcoin (BTC) as legal tender by next year, and follow El Salvador’s example.
Höptner wrote in a blog post, that Bitcoin will help citizens of developing nations financially, as it reduces the transaction fees for transferring money overseas.
“Remittances made up an astounding 23% of El Salvador’s GDP (gross domestic product) in 2020. Across the world, it’s nearly 10% of GDP in the Philippines, which has over 10 million overseas Filipino workers. According to World Bank data, low and middle-income countries receive about 75% of total global remittances.
This money has got to find a way home somehow. But the current system of remittances is…charging [people] an average of 10% just to send money home the next business day… People deserve better. So is it any surprise that Bitcoin – with its near-negligible fees and quick 24/7/365 transactions – would pique the interest of countries reliant on remittances?”
According to the BitMEX Chief Executive, there is another reason why developing countries would benefit from adopting Bitcoin: many of these countries have growing concerns of runaway inflation, Bitcoin is a solution, due to its supply cap, as there can only be 21 million BTC mined.
“The IMF (International Monetary Fund) forecasts 2021 inflation for developed countries at 2.4%. Its estimate for developing countries is more than double, at 5.4%. While consumers in advanced economies might be better placed to weather shocks, people in developing countries are more vulnerable, especially when the price of consumer goods and services is impacted…
Bitcoin fixes this, with its capped supply of 21 million. And developed countries – and/or their people – are noticing.“
Finally, he makes a point that now that the cat is out of the bag, and El Salvador has made the first move, which makes it easier for leaders in other countries to follow the example.
“On a macro level, those who will make the decision to make Bitcoin legal tender will be politicians or rulers. Bitcoin is many things – a technology, a store of value, and a means of payment.
It’s also a cultural touchstone and, at its core, an expression of the user’s lack of faith in the global financial system as presently constructed…
What El Salvador did is take the first leap of faith, making similar moves by other countries much easier to consider.”