El Salvador Set To Become First Country To Make Bitcoin Legal Tender
El Salvador has revealed plans to make Bitcoin legal tender.
It’s thought the country will be the first in the world to accept the digital coin as payment for monetary debt. Bitcoin would join El Salvador’s current official currency, the US dollar.
The plan needs to be backed by Congress for it to go ahead, however.
El Salvador President Nayib Bukele made the announcement on social media this morning, June 6, via a thread of tweets in which he explained that he believes making Bitcoin legal tender in the country will increase its gross domestic product (GDP).
He wrote, ‘#Bitcoin has a market cap of $680 billion dollars. If 1% of it is invested in El Salvador, that would increase our GDP by 25%. On the other side, #Bitcoin will have 10 million potential new users and the fastest growing way to transfer 6 billion dollars a year in remittances.’
Besides, a big chunk of those 6 billion dollars is lost to intermediaries. By using #Bitcoin, the amount received by more than a million low income families will increase in the equivalent of billions of dollars every year. This will improve lives and the future of millions.
Furthermore, 70% of El Salvador’s population doesn’t have a bank account and work in the informal economy. Financial inclusion is not only a moral imperative, but also a way to grow the country’s economy, providing access to credit, savings, investment and secure transactions.
He concluded that these plans could ‘help billions around the world’ as making Bitcoin legal tender could provide ‘a space where some of the leading innovators can reimagine the future of finance’.
According to BBC News, around 20% of El Salvador’s GDP is made up from remittances, or money sent home from abroad.
While he’s yet to give details on how the policy would work, Bueke will reportedly send his plans to Congress next week.
Featured Image Credit: PA Images
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