Pros and cons of accepting bitcoin legally by the government

The outlook and the situation regarding cryptocurrencies and bitcoin for different nations have always been different. Most nations are in favour of cryptocurrencies, while there are others which are not even ready to accept the reality. Some nations in the world nowadays are strong supporters of cryptocurrencies. You can take the example of El Salvador. It has added bitcoin into its legal system and says it will be a prosperous nation in the future. If you are interested in Bitcoin trading, you may use a reputable trading Platform.

On the other hand, there are a few others that believe that bitcoins are going to be a reason for the downfall of El Salvador. So, there are contrasting views on the same, but it is essential to understand the fracture. Without evaluating the positive and negative aspects of accepting bitcoin as a legal tender, it would be not very smart to say anything about it.

Pros

The countries like El Salvador were earlier in a financial crisis. Last year, the El Salvador president addressed the public and said that bitcoin would be official and legal in the country. Many people opposed their decision, and they started to accept it. Also, according to the President of El Salvador, everything is going fine within the nation’s borders. But, all the multinational organisations were warning El Salvador about their actions. A few of the advantages that can be enjoyed by accepting bitcoin in the legal tender are as follows –

  • The first benefit the government can enjoy, as well as the financial system, is its ease of use. The traditional financial system is very complicated for people who are less educated. However, with a few steps and acknowledgement, anyone can use the financial system of bitcoins, which is a plus point.
  • There will be no requirement for adding more and more funds into the system. Everything will be on the internet. Therefore, there will be fewer requirements for the physically existing infrastructure. It is another primary reason why bitcoin should be accepted as a legal tender everywhere.
  • Apart from the above, it is crucial to understand that once the bitcoin is accepted into the legal tender, the paperwork will be zero, which will be an additional benefit for the government.

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When added to any nation’s legal system, these are some prominent advantages of bitcoins. But, there are a few drawbacks, and we will study them further.

Cons

Like any other cryptocurrency or new technology, bitcoin is also not completely free of flaws. It also has a few drawbacks that everyone can experience, and we will learn about them in the below-given points.

  • First, the government will lose control if bitcoin is accepted into the legal tender. As bitcoin is entirely decentralised, the government will not have any power over the money. So they have to sit back and see what happens to the economy once bitcoin is added to the nation’s legal system.
  • When bitcoin is accepted as a legal tender in the country, perhaps there will be more power in the hands of the people. In some nations, it is considered very positive, while in others, it is not at all positive. Government policies and stringent rules and regulations are considered better when managing the financial system. If bitcoin is added to it, anyone will not be able to comply with the rules and regulations of the government because that will no longer be necessary.
  • If bitcoin is accepted as a legal tender in this world, there may be a requirement for more production of cryptocurrencies. A vast population of 7 billion people makes this happen. So, it is quite crucial to create a large number of cryptocurrencies for these people. But, that will require a large amount of energy resource depletion, which adds to the carbon levels. So, bitcoin is not the best option to go with.

A few drawbacks governments will face adding bitcoin as legal tender.

Summary

Just like any other currency, bitcoin is also considered to be positive as well as harmful for the nations. Therefore, there must not be stringent but a few firm rules and regulations to regulate bitcoins or any other digital token.

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