Brazil is moving forward with legislation to allow salary payments in Bitcoin, aiming to enhance its fintech sector, while South Korea’s central bank has ruled Bitcoin out as a reserve asset due to its volatility and failure to meet international standards. This situation underscores a global divide on Bitcoin’s legitimacy as a financial asset.
The global stance on Bitcoin is markedly contrasting, with Brazil advancing legislative measures to permit salary payments in Bitcoin, while South Korea’s central bank declines to acknowledge the cryptocurrency as a reserve asset due to its inherent volatility. Brazilian lawmakers are taking significant steps toward integrating cryptocurrency into the economy, aided by Federal Deputy Luiz Philippe de Orleans e Bragança, who has proposed a bill allowing employees to receive up to 50% of their salaries in Bitcoin. This initiative aims to stimulate Brazil’s financial technology sector and draw in crypto investments, paralleling practices in nations such as Japan, Switzerland, and Portugal where crypto salaries are already in place.
In stark contrast, the Bank of Korea (BOK) in South Korea has decisively rebuffed the inclusion of Bitcoin in its foreign exchange reserves. According to coverage by the Korea Economic Daily, the central bank contends that Bitcoin’s substantial price volatility makes it unsuitable for satisfying the liquidity, market, and credit risk management requisites established by the International Monetary Fund (IMF).
As Brazil positions Bitcoin as a transformative instrument for payroll modernization, South Korea exhibits caution, highlighting concerns regarding Bitcoin’s stability. The BOK emphasizes that the cryptocurrency’s unstable pricing can substantially increase transaction costs when conversion to cash is necessary. Nevertheless, despite differing governmental positions, Bitcoin’s traction continues to grow across numerous financial sectors on a global scale.
The disparity in national approaches to Bitcoin raises critical questions about its legitimacy as a reliable financial asset. If Brazil succeeds in passing its bill, it may pave the way for an uptick in employers adopting cryptocurrency for salary payments. Conversely, skepticism from South Korea and other nations indicates a continued hesitance to embrace Bitcoin as a foundational financial asset.
In summary, Brazil is actively working to integrate Bitcoin into its financial framework by allowing salary payments in the cryptocurrency, while South Korea is firmly rejecting its inclusion in foreign exchange reserves due to concerns over volatility. This divergence in attitudes highlights the ongoing global debate over Bitcoin’s potential as a legitimate financial asset amidst contrasting national strategies and priorities.
Original Source: markets.businessinsider.com
