El Salvador Plans to Make Bitcoin As Legal Tender
El Salvador may become the first country in the world to accept Bitcoin as legal tender as announced by the country’s President Nayib Bukele in a recorded message played at the Bitcoin conference in Miami on 5th June 2021.
El Salvador Planning to Make Bitcoin As Legal Tender
El Salvador President Nayib Bukele is considering creating a law that recognizes Bitcoin the same way as the U.S. dollar, which the country currently uses as its official currency since 2001.
In a recorded message played at a Bitcoin conference in Miami, Bukele announced sending the proposed legislation to the country’s congress that would make the leading cryptocurrency a legal tender.
Partnering with digital wallet Strike, Bukele is said to help the country become the first nation in the world to legally accept Bitcoin as legal money.
Adopting Bitcoin would create jobs and provide financial inclusion to thousands outside the formal economy, Bukele said as 70% of Salvadorans do not have a bank account and works in the informal economy.
“In the short term, this will generate jobs and help provide financial inclusion to thousands.” and would “allow the financial inclusion of thousands of people who are outside the legal economy,” Bukele said.
Remittances from Salvadorans working overseas represent a major chunk of the economy, equivalent to roughly 22 percent of Gross Domestic Product.
“Currently a big chunk of those 6 billion dollars is lost to intermediaries. By using Bitcoin, the amount received by more than a million low income families will increase to the equivalent of billions of dollars every year.” he said.
In 2020, remittances to the country totaled $5.9 billion, according to an official report.
Bill Yet To be Approved in the Parliament
Speaking about the announcement, Strike’s CEO and founder, Jack Mallers, said:
“Adopting a natively digital currency as legal tender provides El Salvador the most secure, efficient and globally integrated open payments network in the world”
“As of now, El Salvador is set to be the first bitcoin country,” Mallers says before adding that his payment company is opening a headquarters in El Salvador in partnership with Blockstream.
The El Salvador government is yet to give details of the bill, which will require approval from the parliament.
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