Bank of America, i of the nation'due south largest financial institutions based on total avails, believes El Salvador could have a lot to proceeds with its latest foray into Bitcoin (BTC).

In a report published last calendar week, analysts at the depository financial institution said Republic of el salvador's decision to recognize BTC equally legal tender could streamline remittances, promote financial digitization, provide consumers with greater selection, and open up the land to American firms and digital currency miners.

The bank noted that remittances business relationship for a staggering 24% of El Salvador'southward gross domestic product, but a sizable clamper of that goes toward transaction fees.

"Using Bitcoin for remittances could potentially reduce transaction costs compared to traditional remittance channels," the report said, co-ordinate to an paradigm provided by state-backed Diario El Salvador. "The idea is that Bitcoin could be used as an intermediary for the cross-edge transfer then that dollars are converted to Bitcoin by the sender then converted dorsum to dollars domestically past the receiver."

In June of this yr, El Salvador became the first nation-state to take Bitcoin as legal tender, marking an important milestone in the digital currency'southward evolution from obscurity to mainstream acceptance. The decision to integrate BTC into the country's financial system has been met with criticism by the International monetary fund and the Un' Economic Committee for Latin America and the Caribbean area. Meanwhile, JPMorgan Chase believes El Salvador's Bitcoin gambit could identify additional force per unit area on the network's already limited ability to serve equally a medium of commutation.

Related: Inside El Salvador's Bitcoin experiment: Cointelegraph video study

Survey data shows one-half of Salvadorans are skeptical virtually using BTC as legal tender. Those who cull to adopt BTC for transactions can apply the country-backed Chivo Bitcoin wallet, among many other options available to them.

Since Republic of el salvador recognized Bitcoin as legal tender, several other Latin American nations accept hinted at pursuing a cryptocurrency strategy of their own. Nonetheless, until now, no other country has followed in El salvador'southward footsteps.

Related: Republic of el salvador to airdrop $30 in Bitcoin to every adult citizen