Bitcoin's volatility makes the scenario seem unlikely, but some see El Salvador as a test case for other countries with high poverty and a dependence on cross-border remittances.
Banks are recommending corporate treasurers protect themselves against FX swings, which have been muffled recently by record-low interest rates and Fed liquidity support.
Despite a Twitter-user outcry, and loss of value for some cryptocurrency-related assets, market observers point out that this matches IRS treatment of cash transactions.
Price roller-coaster underscores that because bitcoin has no underlying profit streams or interest payments, it's inherently a speculative bet on future market trends.
"We want to signal our support for credit-sensitive rates alongside SOFR. There's a lot of work being done on having a rate that looks and feels like LIBOR," according to a BofA representative.
Market embraces ISDA pact to automatically substitute a replacement rate for hundreds of trillions of dollars worth of interest-rate swaps, futures, and options.
