In today's digital age, Bitcoin as a virtual currency has deeply penetrated into our lives. However, what impact will it have if Bitcoin becomes legal tender? Let's explore this interesting topic together.

As a cryptocurrency, Bitcoin has been controversial for its large value fluctuations and high transaction anonymity. If Bitcoin becomes legal tender, it will first have a profound impact on the financial system. Traditional financial institutions may be impacted because the decentralized nature of Bitcoin will challenge the existence of traditional financial institutions. At the same time, the value fluctuations of Bitcoin may also cause drastic fluctuations in the financial market and affect the global economy. Therefore, Bitcoin becoming legal tender will bring about great changes in the financial field.

At the monetary policy level, Bitcoin becoming legal tender may have a significant impact on the central bank's monetary policy. Since the total amount of Bitcoin is limited and is not controlled by the government, it will be difficult for the central bank to regulate the economy through traditional monetary policy means. This will enable the central bank to re-examine the monetary policy framework and explore more flexible monetary policy tools. At the same time, the anonymity of Bitcoin may also be used for illegal activities, bringing challenges to the implementation of monetary policy. Therefore, Bitcoin becoming legal tender will have a profound impact on monetary policy.

From the perspective of international trade, Bitcoin becoming legal tender may change the global trade pattern. Due to the cross-border payment characteristics of Bitcoin, international trade will be more convenient and faster, reduce transaction costs, and promote the development of global trade. However, the fluctuation of Bitcoin's value may also lead to increased trade risks, and countries need to strengthen regulatory cooperation to ensure the stability of international trade. Therefore, Bitcoin becoming a legal tender will have a profound impact on international trade.

At the social level, Bitcoin becoming a legal tender will change people's payment habits and financial concepts. The popularity of Bitcoin will promote the development of digital payments, accelerate financial technology innovation, and improve the efficiency of financial services. However, the security of Bitcoin also faces challenges, and it is necessary to strengthen network security protection and prevent financial risks. Therefore, Bitcoin becoming a legal tender will have a profound impact on society.

In general, Bitcoin becoming a legal tender will trigger multiple impacts on finance, monetary policy, international trade and society. In the face of this change, all parties need to work together to strengthen regulatory cooperation, promote the compliance development of Bitcoin, and achieve sustainable development of the digital economy. Bitcoin's legal status may only be the prelude to the financial revolution, and more unknown challenges and opportunities are waiting for us to explore. Let us wait and see and witness a new chapter in the financial field.

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

As we all know, Bitcoin is a digital currency developed based on blockchain technology. Although Bitcoin is a digital currency, it is not equivalent to a real currency. For more people, Bitcoin is still just a special commodity, not a currency. Chinese law also clearly defines Bitcoin and other digital currencies as commodities, not currencies. Today, Bitcoin is still not accepted by most countries, but not long ago, the Legislative Assembly of El Salvador granted Bitcoin the legal status of legal tender in El Salvador. This is the first country in the world to use Bitcoin as legal tender. So what will happen if Bitcoin becomes legal tender? Many investors want to know what the impact will be? Let the editor of the currency circle talk about it below.

 What will happen if Bitcoin becomes legal tender?

Although the government has officially developed the Chivo
Wallet software to support the application and payment of Bitcoin, El Salvador emphasizes that the government will not force the people of the country to accept Bitcoin as a payment method. Salvadoran citizens who download Chivo Wallet in the app store will receive $30 worth of Bitcoin. Chivo allows citizens to automatically convert Bitcoin transactions into US dollars, which can be kept in the Bitcoin wallet or withdrawn in cash at 200 ATMs in El Salvador.

President Nayib Bukele
stressed that Salvadoran citizens can choose to download the application to send and receive remittances without paying any fees, and citizens who do not want to use it can choose not to download the wallet. Using Bitcoin is not mandatory.

As for the corporate level, the Bitcoin Law passed by the Salvadoran Congress in June forced all local stores and businesses to accept Bitcoin as a payment method starting on September 7, even international companies such as McDonald's and Starbucks are no exception.

 What is the impact of Bitcoin becoming a legal tender?

In fact, many locals have been protesting the bill, and the authorities have even arrested a cryptocurrency expert who publicly criticized the initiative. At the same time, the World Bank also emphasized their concerns that after the Salvadoran government adopted Bitcoin as legal tender, credit rating company Moody's downgraded the country's credit rating.

However, even the government's strong promotion has failed to dispel people's concerns about Bitcoin. According to a private survey by the Central American University, about 70% of Salvadorans oppose Bitcoin as legal tender, and opposition lawmakers have launched an effort to repeal the law. In a poll conducted by the Salvadoran newspaper La Prensa Gráfica in August, most respondents said they opposed the Bitcoin Law, and nearly three-quarters of respondents said they would not accept Bitcoin as a payment method. Thousands of people participated in a protest later on September 6 to oppose the adoption of Bitcoin as legal tender.

President Nayib Bukele said that making Bitcoin legal tender would not only create jobs and help provide financial inclusion for thousands of people "outside the formal economy", but it would also make it easier for Salvadorans living abroad to send money home.

According to the World Bank, 20% of El Salvador's GDP comes from US dollars sent home by overseas expatriates. Many people in El Salvador go to the United States to work and then send money back home. Switching to Bitcoin will indeed greatly reduce the cost of remittances from overseas Chinese, but it will also test the trust of grassroots people in Bitcoin. Today, Bitcoin is still not accepted by most countries, which will make many people wait and see.

After Bitcoin became legal tender on September 7, the El Salvador government bond market also became chaotic. Usually, most countries have higher long-term government bond interest rates, and the bond yield curve is upward sloping. But now the El Salvador government bond interest rate curve has begun to go down (the entire yield curve is inverted), and the turning point happened to appear in June when the Bitcoin law was passed.

Ben Emons, a strategist at consulting firm Medley Global Advisors, pointed out that the long-term yield of El Salvador’s government bonds fell on the first day of the implementation of the new Bitcoin law. He said that this change is "unwelcome and indicates that the widespread use of Bitcoin may have a significant impact on the country."

So what does an inverted yield curve mean for the country? In fact, an inverted yield curve is a typical signal of an impending recession.

To sum up, this is the answer to the two questions of what will happen if Bitcoin becomes a legal tender and what impact will Bitcoin become a legal tender. I hope that this article can help investors who are curious about this issue have a more comprehensive and thorough understanding. The editor of the Coin Circle reminds all investors here that it is not a trivial matter to use Bitcoin as a legal tender. The adoption of Bitcoin will bring a series of financial, legal and macroeconomic issues, which we need to analyze carefully. It can be said that one move affects the whole body. The problems are still very complicated. In a short period of time, it is still difficult for Bitcoin to become a legal tender in most countries.