El Salvador has officially made Bitcoin a legal tender, but an executive at Fidelity believes the cryptocurrency will be tested.
Bitcoin will be tested as a medium of exchange
Fidelity Investments director Jurrien Timmer believes that Bitcoin will be tested as a medium of exchange now that El Salvador has made it a legal tender. Bitcoin became a legal tender in El Salvador earlier this week, and the move is expected to spur further adoption globally.
In an interview with CNBC, Timmer said Bitcoin had been considered as an asset, but it will now be tested as a medium of exchange. He likened the transition to that of gold which went from a medium of exchange to an asset class.
Timmer said, “Although it’s in reverse; because gold went from being money to being an asset class in the seventies. Bitcoin is trying to go from being asset class to also being a currency or being money.”
Thanks to the adoption by El Salvador, the Fidelity exec said Bitcoin will now be tested as a medium of exchange.
El Salvador’s adoption is overplayed
The cryptocurrency community considers Bitcoin’s adoption as a legal tender in El Salvador as a big deal. However, Timmer feels that it is a bit overplayed. He explained that “Because it’s not like El Salvador has dropped the U.S. dollar as its peg. It’s not like it switched from dollars as its currency peg to Bitcoin.”
He pointed out that El Salvador still accepts the US Dollar, and the people can decide to be paid or pay in USD. Hence, making Bitcoin’s adoption voluntary. However, merchants in El Salvador are mandated to accept BTC and process the payment to their clients.
Despite that, the achievement is a big one for the cryptocurrency space and could be a major catalyst for future adoption.