El Salvador has passed a resolution to make Bitcoin a legal currency, making it the first country to do so (above The guard). By law, citizens can use Bitcoin to do anything from paying taxes and debts to buying goods and services. The move was championed by President Nayib Bukele, who says it is a way to help those who do not have access to banks and those who want to send money back into the country from overseas, but critics fear it will be more than a show a change in content.
The proposal was passed by the El Salvador Congress on Tuesday evening after Bukele announced it at a Bitcoin conference in Miami last week. It was not a close decision as 62 out of 84 MPs voted for it, but it is worth noting that Bukele has great political power in the country – his party holds a majority in Congress, which allowed him to take control of much of the government earlier this year.
While Bitcoin will become an official currency for El Salvador in just under three months, it won’t be the only currency – however, the U.S. dollar, which was previously the country’s only currency, will remain as an option according to Kryptonews Bukele said he wanted the country’s citizens to think about money in bitcoin, not dollars. The resolution says that citizens should be able to convert between the two currencies at any time and that the US dollar is used “as the reference currency” for bookkeeping.
According to The Guardian, some human rights groups focused on Central America have doubts about the introduction of Bitcoin, which will lead to significant changes for many citizens of the country. One concern is that the country’s underclass does not have access to the technology required to use and store Bitcoin. While the law requires anyone offering goods or services to accept Bitcoin, it does have an exception for those who do not have access to technology. The law states that the government “will promote the necessary training and mechanisms” to enable the population to use Bitcoin.
The country isn’t a big center for bitcoin mining right now – noisy University of Cambridge estimates, it’s not in the top 10 mining countries. In fact, according to the university’s map, El Salvador’s contributions account for 0.00 percent of the global computing power used for Bitcoin. However, Bukele could try to change that – he tweeted that the state-owned electricity company was ordered to provide cheap electricity for mining, which is powered by volcanoes (no, that’s no joke).
I just told the president @LaGeoSV (our state-owned geothermal electricity company) to develop a plan to build facilities for #Bitcoin Mining with very cheap, 100% clean, 100% renewable, emission-free energy from our volcanoes
That will develop quickly! pic.twitter.com/1316DV4YwT
– Nayib Bukele (@nayibbukele) June 9, 2021