Yesterday, news broke that Nayib Bukele, President of El Salvador, announced that he was soon introducing legislation which would make the country the first sovereign state in the world to adopt Bitcoin as legal tender. He made the announcement via video to the Bitcoin 2021 conference held in Miami, noting that implementation would be in partnership with a digital wallet company tasked with upgrading the country’s financial infrastructure to make the transition possible.

“While other countries are jockeying for position, trying to ensure that they are ready to launch a CBDC, El Salvador is moving the other direction, eager to adopt cryptocurrency in a different fashion,” said Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges.

“What’s interesting about this move is that it could foreshadow a new approach taken by smaller countries with fewer resources to spend on infrastructure upgrades. The global powers are all certain to compete to make sure their own digital currency is king. CBDCs will help unbanked populations and will, very likely, also make banking far less expensive. Major powers will want to harness and consolidate the power of digital currencies for themselves. But, smaller countries like El Salvador may have just opened the door to a digital financial revolution utilizing technology which already exists,” noted Gardner.

Thus far, CBDCs have found willing audiences across the globe. The Bahamas launched its own digital currency, while China is rolling out beta testing of its e-yuan to trial segments of the population in key cities. The EU, Britain, and the United States have all started to evaluate how virtual currencies would enhance their own financial systems.

“CBDCs are the new frontier in digital assets. But El Salvador is moving with vigor to be the first nation to embrace Bitcoin in this fashion, putting it on par with the US Dollar. While the country has a relatively small economy, it is a symbolic step which indicates its president is interested in a blockchain future. The technology behind Bitcoin and CBDCs is truly revolutionary. There will be many ways to harness its power, and the industry should watch how the Central American nation rolls out its financial infrastructure to allow for adoption, assuming that the legislation passes into law,” said Gardner.

Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Over the past twenty years, the company has built technology for the world’s most notable exchanges, with a client list which includes NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.

“One of the most important things to note is that, regardless of what form it takes, digital currencies are the future. So, governments, exchanges, and multinational corporations are going to want to begin to plan for it now. If you don’t want to get blindsided, the smart move is to begin to make sure that your technological infrastructure is ready to adapt to the change, particularly as more and more financial systems begin to trend towards a digital future,” Gardner said.