Hailing as a renowned investment banking institute, JP Morgan has given a major blow to the crypto industry by highlighting Bitcoin’s negative impact on the economic spectrum of EL Salvador, reflecting a limitation on its use in the state.
The banking group has revealed that Bitcoin’s limited liquidity, high volatility, and US Dollar conversion issue are major concerns that can restrict its adoption as a legal tender. The statement by the banking authority has created chaos in the crypto domain as investors are concerned about the issues highlighted by the JP Morgan team.
As per the report, El Salvador’s daily payment structure constitutes nearly 4% of on-chain transactions and over 1% of the total transacted token volume transferred between wallets in the past 12 months span. The country’s regulatory authority presented the native Bitcoin Law on June 8 to facilitate the adoption of crypto as a legal tender on September 7 across the region. Ever since the bill has been passed by President Nayib Bukele, the locals have given a mixed reaction to it. Some critics have raised objections citing that the act violates their constitutional rights.
In a survey conducted by the JP Morgan group, the bank found that a major section of the El Salvador population criticized the law by calling the imposition incorrect. Nearly 46% of people who participated in the poll revealed that they do not know what Bitcoin and crypto were, which can be seen as a serious concern for the future. The group stated that the conversions on the regulatory portal had the power to exploit the onshore liquidity of the US Dollar, causing disturbances in the balance of payments and fiscal structure.
