President of El Salvador wants Bitcoin as legal tender

El Salvador may be the first country to make Bitcoin legal tender after President Nayib Bukele announced he would soon propose a bill that could transform an economy that is on remittances.

The move will make the Central American country the first in the world to officially accept cryptocurrency as legal money and will "enable the financial inclusion of thousands of people who are outside the legal economy", Bukele said on Saturday.

“Next week, I will be submitting to Congress a bill that makes Bitcoin legal money,” he said in a video message to the 2021 Bitcoin conference in Miami.

He said the bill was at creating jobs in a country where "70 percent of the population is unbanked and works in the informal economy". The government has not provided details of the bill, which would require approval from a parliament dominated by the president's allies.

Remittances from Salvadorans working abroad represent a large part of the economy equivalent to about 22 percent of gross domestic product (GDP). Last year, remittances to the country totaled $5.9 billion, according to official reports.

Strike, a mobile payments app that launched in El Salvador in March, said in a statement that it welcomes the legislation and is working with the country to make the use of Bitcoin technology successful.

“Adopting native digital currencies as legal tender provides El Salvador with the most secure, efficient and globally integrated open payment network in the world,” said Strike founder and CEO Jack Mallers.

The cryptocurrency market grew by more than $2.5 trillion in mid-May 2020, according to the CoinMarketCap page, fueled by interest from increasing serious investors from Wall Street to Silicon Valley.

But Bitcoin's volatility is currently priced at $36.127 and its dismal legal status has raised questions about whether it can replace fiat currency in day-to-day transactions.


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