NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

By S.J. Ware

Bitcoin is, for many, the first opportunity to store wealth in a safe and secure manner, without outside manipulation.

El Salvador’s decision to use bitcoin as legal tender in their country was recently celebrated by bitcoin holders around the world. Yet the International Monetary Fund (IMF) quickly expressed concerns about the legality of doing so. Was this simply a matter of traditional financial institutions guarding their fiat turf from bitcoin, a digital asset they don’t understand? How can bitcoin and its blockchain technology facilitate financial inclusion and benefit 1.7 billion unbanked people throughout the world?

While the pandemic greatly accelerated the digitization of assets as stores of value, it also hampered the ability of traditional regulatory and legal bureaucracies to match the pace of bitcoin’s rapid evolution into the premier digital asset of choice. Understandably, those in control of the legacy banking system have cause for concern, since Bitcoin’s decentralized ledger exists outside the control of the traditional international financial system.