Cryptocurrency

This country becomes the first in the world to allow bitcoin as legal tender

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bitcoin

El Salvador has become the primary country within the world to formally adopt bitcoin as a tender after Congress approved President Nayib Bukele’s proposal to embrace cryptocurrency.

With 62 out of 84 possible votes, a majority of lawmakers voted in favor of the initiative to make a law that will formally adopt bitcoin, despite concern about the potential impact on El Salvador’s program with the International fund.

Bukele has touted the utilization of bitcoin for its potential to assist Salvadorans living abroad to send remittances back home while saying the U.S. dollar also will continue as tender.

“It will bring financial inclusion, investment, tourism, innovation, and economic development for our country,” Bukele said during a tweet shortly before the choose Congress, which is controlled by his party and allies.

He added that the utilization of bitcoin, whose use is going to be optional, wouldn’t bring risks to users. Its use as tender will enter law in 90 days.

“The government will guarantee the convertibility to the precise value in dollars at the instant of every transaction,” Bukele said.

El Salvador’s dollarized economy relies heavily on money sent back from workers abroad. International Bank for Reconstruction and Development data showed remittances to the country made up nearly $6 billion or around a fifth of GDP in 2019, one among the very best ratios within the world.

Experts have said the move to bitcoin could complicate talks with the IMF, where El Salvador is seeking a quite $1 billion program.

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