Reduction of remittance fees, which may increase the amount of current transfers from the U.S. (Sparkes, 2022Sparkes, M. (2022). El Salvador revamps bitcoin system. New Scientist, 253(3373), 8. https://doi.org/10.1016/s0262-4079(22)00215-9 https://doi.org/10.1016/s0262-4079(22)00...
; Sorto Rivas, 2022Sorto Rivas, F. (2022). Situación económica en el marco de la adopción del Bitcoin como moneda de curso legal en El Salvador. AKADEMOS, 1(36-37), 7-17. https://doi.org/10.5377/akademos.v1i36-37.14944 https://doi.org/10.5377/akademos.v1i36-3...
; Mohammed et al., 2023Mohammed, M. A., De-Pablos-Heredero, C., & Montes Botella, J. L. (2023). Exploring the Factors Affecting Countries’ Adoption of Blockchain-Enabled Central Bank Digital Currencies. Future Internet, 15(10), 321. https://doi.org/10.3390/fi15100321 https://doi.org/10.3390/fi15100321...
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Increased macroeconomic risk. The approval of the Bitcoin Law may harm future negotiations with the IMF due to increased country risk (Fusades, 2021Fusades. (2021). Ley Bitcoin: una ley que genera incertidumbre para los salvadoreños. Fundación Salvadoreña para el Desarrollo Económico y Social.) |
It can foster financial innovations by promoting the financial inclusion of a significant portion of the population that is unbanked but has a cell phone. (Vincent & Evans, 2019Vincent, O., & Evans, O. (2019). Can cryptocurrency, mobile phones, and internet herald sustainable financial sector development in emerging markets? Journal of Transnational Management, 24(3), 259-279. https://doi.org/10.1080/15475778.2019.1633170 https://doi.org/10.1080/15475778.2019.16...
: Alonso et al., 2022Alonso, S. N., Fernández, M. A. E., Vázquez, J. J., & Szymla, W. (2022). CBDC y DEFI en el Caribe, Sudamérica y Centroamérica: análisis de la situación. In Digitalización de empresas y economía: tendencias actuales (pp. 282-306). Dykinson.) |
Environmental risk. Mining of this asset generates high electricity consumption. (Jiang et al, 2021Jiang, S.; Li, Y.; Lu, Q.; Hong, Y.; Guan, D.; Xiong, Y.; Wang, S. (2021). Policy assessments for the carbon emission flows and sustainability of Bitcoin blockchain operation in China. Nature Communications, 12(1). https://doi.org/10.1038/s41467-021-22256-3 https://doi.org/10.1038/s41467-021-22256...
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It can drive the adoption of bitcoin as a medium of exchange internationally. (Sparkes, 2022Sparkes, M. (2022). El Salvador revamps bitcoin system. New Scientist, 253(3373), 8. https://doi.org/10.1016/s0262-4079(22)00215-9 https://doi.org/10.1016/s0262-4079(22)00...
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High volatility of the digital asset, which generates commercial uncertainty and makes economic calculation difficult. Bitcoin is far from being a widely accepted medium of exchange. (De Oliveira Monteiro et al., 2019De Oliveira Monteiro, A. H., de Souza, A. D., Batista, B. G., & Zaparoli, M. (2019). Market prediction in criptocurrency. Proceedings of the XV Brazilian Symposium on Information Systems. http://dx.doi.org/10.1145/3330204.3330272 http://dx.doi.org/10.1145/3330204.333027...
; Sorto Rivas, 2022Sorto Rivas, F. (2022). Situación económica en el marco de la adopción del Bitcoin como moneda de curso legal en El Salvador. AKADEMOS, 1(36-37), 7-17. https://doi.org/10.5377/akademos.v1i36-37.14944 https://doi.org/10.5377/akademos.v1i36-3...
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If there is a depreciation in the future economic agents who have saved in that asset will lose part of their wealth. |
Attraction of investment for the mining of this digital asset. (Alvarez et al., 2022Alvarez, F., Argente, D., & Van Patten, D. (2022). Are cryptocurrencies currencies? Bitcoin as legal tender in El Salvador. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.4094160 https://doi.org/10.2139/ssrn.4094160...
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Transaction costs are added when switching from dollars to bitcoin, and vice versa. In fact, this cost is currently higher than traditional remittance. (Fusades, 2021Fusades. (2021). Ley Bitcoin: una ley que genera incertidumbre para los salvadoreños. Fundación Salvadoreña para el Desarrollo Económico y Social.) |
If the price of bitcoin increases in the future, economic agents who have saved in this digital asset will see their wealth increase. (Fantazzini & Calabrese, 2021Fantazzini, D., & Calabrese, R. (2021). Crypto exchanges and credit risk: Modeling and forecasting the probability of closure. Journal of Risk and Financial Management, 14(11), 516. https://doi.org/10.3390/jrfm14110516 https://doi.org/10.3390/jrfm14110516...
; Fantazzini, 2022Fantazzini, D. (2022). Crypto-Coins and credit risk: Modelling and forecasting their probability of death. Journal of Risk and Financial Management , 15(7), 304. https://doi.org/10.3390/jrfm15070304 https://doi.org/10.3390/jrfm15070304...
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May encourage money laundering activities. (Fusades, 2021Fusades. (2021). Ley Bitcoin: una ley que genera incertidumbre para los salvadoreños. Fundación Salvadoreña para el Desarrollo Económico y Social.) |
Increase in state digital education initiatives for the general population. (Sparkes, 2022Sparkes, M. (2022). El Salvador revamps bitcoin system. New Scientist, 253(3373), 8. https://doi.org/10.1016/s0262-4079(22)00215-9 https://doi.org/10.1016/s0262-4079(22)00...
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Disagreement of the population with the use of bitcoin as legal tender. (Alvarez et al., 2022Alvarez, F., Argente, D., & Van Patten, D. (2022). Are cryptocurrencies currencies? Bitcoin as legal tender in El Salvador. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.4094160 https://doi.org/10.2139/ssrn.4094160...
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