The following diagram conceptually illustrates the two model options that a central bank must offer to a digital currency. The one discussed in the document is the general CBDC. Anyway, the truth is that the small Central American country has undoubtedly become the center of attention of Bitcoin supporters and critics. Their success or failure could determine whether or not the use of cryptocurrencies spreads in the future. This big fluctuation may mean that a person who will use Bitcoin to buy a shirt that was worth the equivalent of $30 yesterday will not reach it today because the value of the cryptocurrency has fallen, Villalona cites as an example. In order to encourage the use of these ATMs and the acquisition of Bitcoin among the population, the government has provided all citizens of the country with the equivalent of a $30 check. The result? For weeks, the lines for withdrawals were endless. However, we have to leave it to our imagination to find out if the implementation of Bitcoin in El Salvador was really successful or if citizens just wanted that $30 as soon as possible. They are similar to stablecoins, which are pegged to a specific fiat currency at a 1:1 ratio. But stablecoins, such as Tether (USDT), are managed by private companies that hold central bank-issued cash or equivalent liquidity. They hold these assets so that their stablecoins can reflect the exact value of fiat currencies.
The president also pointed out that about 70% of the population does not have a bank account and works in the informal economy, so cryptocurrencies could improve their financial inclusion. Central banks literally print U.S. dollars or pounds sterling, so the physical notes in your wallet don`t meet the «digital form» criterion. For example, Bukele said that if a fruit seller doesn`t want to take the risk of fluctuation and decides to change the bitcoins she receives with her work into dollars, that state bank will buy them at the price at which they valued their fruit, whether or not the value has changed since the sale. until she deposits the cryptocurrency with the bank. Following the announcement of Bitcoin by the government of El Salvador, various companies such as McDonald`s and Pizza Hut began accepting the currency as a payment method throughout the territory. Payment in digital currencies is made via the payment operator OpenNode. This makes it possible to make payments both in BTC and through the second-layer Lightning solution. Virtual currencies may include (but are not limited to): The Chinese CBDC, the digital yuan, is the most popular driver at the moment. It has been used in more than 70.75 million transactions worth 34.5 billion yuan ($5 billion) as of the end of June 2021. The country has distributed millions of digital yuan to citizens to test the technology — and generate some enthusiasm for it.
At Cronuts.digital, we`ve been helping people like you get it right for many years if they want or have invested in cryptocurrencies. We have experts who can help you manage the taxation of cryptocurrencies in the profit and loss account, know how a cryptocurrency transfer is made, how to manage the investment, etc. There are other regulatory challenges that are more operational but equally relevant, such as customer identification, consumer protection, defining internal controls, and managing cybersecurity risks, as the likelihood of attacks increases in a digital operating environment. According to expert opinion, Bitcoin may not be the best thing for an entire country`s economy. In fact, it is true that investing in cryptocurrencies can bring a lot of profitability on a personal level, but whenever it is done responsibly. There are many people who have become rich through the buying and selling of these digital currencies.