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According to Jurrien Timmer of Fidelity, the impact of El Salvador’s Bitcoin decision is “a little bit overstated.”
The introduction of Bitcoin (BTC) as legal cash in El Salvador has been highly praised across the crypto world, but one analyst says the significance of the rollout has been overstated.
Speaking to CNBC, Fidelity Investments director Jurrien Timmer said that the significance of El Salvador’s Bitcoin move is “a little bit overplayed.”
“Because it’s not like El Salvador has dropped the U.S. dollar as its peg,” Timmer explained. “It’s not like it switched from dollars as its currency peg to Bitcoin.”
He emphasised that the country still retains the US dollar and that people can choose to be paid in dollars or pay in dollars, and that the adoption is entirely optional. While paying in Bitcoin is optional in El Salvador, local merchants are required to accept and process BTC transactions.
Timmer remarked that Bitcoin is being tested as a means of trade rather than a store of wealth for the first time. He emphasised that Bitcoin’s scarcity and powerful network are its essential values, and that the proof-of-work algorithm makes Bitcoin, by design, less scalable than alternative cryptocurrencies such as Ether (ETH).
The Fidelity executive compared Bitcoin’s current moment to an “adolescent’s coming of age” like gold was in the 1960s:
“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.”
As Cointelegraph reported, El Salvador made history on Tuesday, Sept. 7, by making Bitcoin legal tender. The government also provided a state-issued wallet named Chivo.