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This move, if approved, will make El Salvador the first country in the world to officially accept cryptocurrency as a legal currency.
After President Nayib Bukele announced that he would soon introduce a bill that would change the economy that relies on remittances, El Salvador may become the first country to make bitcoin a legal tender.
Bukele said on Saturday that this move will make this Central American country the first country in the world to officially accept cryptocurrency as a legal currency, and will “allow thousands of people outside the legal economy to carry out financial inclusion.”
“Next week, I will submit a bill to the Congress to legalize Bitcoin,” he said in a video message of the 2021 Bitcoin Conference in Miami.
He said the bill aims to create jobs in a country where “70% of the population has no bank accounts and works in the informal economy”.
Welcome to the future???????? #Bitcoin pic.twitter.com/j30vcZVXvJ
-Nayib Bukele ???????? (@nayibbukele) June 5, 2021
The government has not provided the details of the bill, which needs to be approved by the parliament led by the president’s allies.
The remittances of Salvadorans working overseas account for the major part of the economy-roughly equivalent to 22% of gross domestic product (GDP).
According to official reports, the total amount of remittances to the country last year was US$5.9 billion.
Strike, a mobile payment application launched in El Salvador in March, welcomed the legislation in a statement and is working with the country to make the use of Bitcoin technology successful.
Quoting at the Miami conference, Strike founder and CEO Jack Mallers, who introduced the Bukele video, said: “This is the voice that Bitcoin hears all over the world.”
“Using local digital currency as legal tender provides El Salvador with the safest, most efficient and globally integrated open payment network in the world,” said Mulles.
According to data on the CoinMarketCap page, the cryptocurrency market grew to more than $2.5 trillion in mid-May 2020, driven by the interest of more and more serious investors from Wall Street to Silicon Valley.
But Bitcoin’s volatility (currently price of $36,127) and its obscure legal status have raised questions about whether it can replace legal tender in daily transactions.
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