The move, if approved, would make El Salvador the first country in the world to officially accept cryptocurrency as legal money.
El Salvador could be the first country to make Bitcoin legal tender after President Nayib Bukele announced that he would soon be putting forward a bill that could transform the remittance-dependent economy.
The move would make the Central American nation the first in the world to formally accept cryptocurrency as legal money and would “enable the financial inclusion of thousands of people living outside the legal economy,” Bukele said on Saturday.
“Next week I’ll send a bill to Congress that will turn Bitcoin into legal money,” he said during a video message to the Bitcoin 2021 conference in Miami.
He said 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.”
– Nayib Bukele 🇸🇻 (@nayibbukele) June 5, 2021
The government has yet to release details of 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 (GDP).
Last year, remittances to the country totaled $ 5.9 billion, according to official figures.
Strike, a mobile payments app 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 a success.
“This is the shot that is being heard worldwide for Bitcoin,” Strike founder and CEO Jack Mallers, who presented Bukele’s video, was quoted as saying at the conference in Miami.
“The introduction of a native digital currency as legal tender offers El Salvador the most secure, efficient and global open payment network in the world,” said Mallers.
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 everyday transactions.