El Salvador’s Bukele to propose making bitcoin legal tender

Issued on: Changed:

San Salvador (AFP)

El Salvador could be the first country to adopt Bitcoin as legal tender, President Nayid Bukele announced on Saturday, saying he would soon propose a bill that could transform the remittance-dependent economy.

The move would make the Central American nation the first nation in the world to formally accept cryptocurrency as legal money and would “enable the financial inclusion of thousands of people who are outside the legal economy,” said Bukele.

“Next week I will send a bill to Congress that will turn Bitcoin into legal money,” the populist leader said during a video message to the Bitcoin 2021 conference in Miami, Florida.

The bill aims to create jobs in a country where “70 percent of the population have no bank accounts and work in the informal economy”.

The government of El Salvador has not yet released details on the bill, which requires the approval of a parliament dominated by the president’s allies.

Remittances from Salvadorans working abroad make up a large part of the economy – that’s around 22 percent of gross domestic product.

In 2020, remittances to the country totaled $ 5.9 billion, according to official figures.

According to Bukele, Bitcoin is “the fastest growing way to transfer those billions of dollars in remittances” and prevent millions from being lost to intermediaries.

“Thanks to the use of Bitcoin, the amount that more than a million low-income families receive is increasing by billions of dollars each year,” the president said.

“That improves the lives and the future of millions of people.”

According to the Coinmarketcap page, the cryptocurrency market grew to more than $ 2.5 trillion in mid-May 2020, fueled by the interest of increasingly serious investors from Wall Street to Silicon Valley.

But Bitcoin’s volatility – currently priced at $ 36,127 – and its unclear legal status have raised the question of whether it could ever replace fiat currency in day-to-day transactions.

Comments are closed.