Central America Nation the Republic of El Salvador has become the 1st country to officially adopt bitcoin as legal tender. Proposal to legalise cryptocurrency was put forward by President Nayib Bukele which was later approved by Congress.
- Even though there were concern regarding potential impact of legalising cryptocurrency on El Salvador’s program of $1 billion with International Monetary Fund, proposal was passed with majority of 62 out of 84 possible votes.
- Digital currency, Bitcoin was approved considering its potential to help Salvadorans living abroad to send remittances back home. US dollar will also continue as legal tender in country.
- It will bring financial inclusion, investment, innovation, tourism and economic development in El Salvador.
Bitcoin as a Remittances in El Salvador
According to the World Bank data, remittances from bitcoin to the country accounts for $6 billion in the year 2019. It is around a fifth of GDP & a highest ratio across the world.
The decentralized digital currency which lacks central bank or single administrator. It is sent from user to user on peer-to-peer bitcoin network. It does not need any intermediaries.
El Salvador 1st country to adopt bitcoin as legal tender