JPMorgan isn’t quite happy with El Salvador’s decision to authorize (Bitcoin (BTC) as an optional legal tender in the country. The banking firm noted that passing the Bitcoin law could pose a challenge for Bitcoin as well as the country itself. Analysts of JPMorgan noted that Bitcoin’s daily trading volume hits anywhere between $40 to $50 billion, as reported by Bloomberg.
Bitcoin’s adoption as legal tender could pose challenges to El Salvador.
Analysts of JPMorgan noted that Bitcoin’s daily trading volume hits anywhere between $40 to $50 billion. However, most of this has been internalized by major exchanges. Analysts further added that a large port of BTC remains illiquid, with over 90% not changing hands in a year. JPMorgan said this illiquidity and the volume is “potentially a significant limitation on its potential as a medium of exchange.” It further added: “Daily payment activity in El Salvador would represent ~4% of recent on-chain transaction volume and more than 1% of the total value of tokens which have been transferred between wallets in the past year.”
JPMorgan is not the only one to criticize the bitcoin law.
As reported earlier, the Latin American country passed the Bitcoin law making it an optional legal tender alongside the U.S. Dollars. As a result, merchants and service providers will have to accept Bitcoin as a means of payment. However, El Salvador’s decision did not sit well with global financial regulators. Earlier, the World Bank had refused to help the Central American country in transitioning to bitcoin. Several other global financial regulators also expressed similar views about the latest bitcoin law in El Salvador.