Jurrien Timmer, DIR of Fidelity Investments in an interview with CNBC, said that the significance of El Salvador’s move towards Bitcoin is a little melodramatized.
On September 7, El Salvador became the first country in the world to accept Bitcoin as a legal tender. He said that this exercise of using Bitcoin is still voluntary because the people still have the option of using U.S dollar.
Money is regarded as a medium of exchange and has a store of value but Bitcoin’s value proposition is not stable and is decentralized which might pose problems while scaling, Jurrien said in an interview. He compared the move with adjustment of gold stating:
Its new chapter and people will have to get used to its adoption and will have to bring into a level playing field with the currency, just like it happened with gold in 1970.
Jurrien also clarified that one cannot compare the two entities, Gold and Bitcoin, both will have an opposite transition in the monetary world. While gold was becoming an asset class from money, Bitcoin is now transitioning from an asset class to the currency.