El Salvador Is the First Country In the World To Recognize Bitcoin As Legal Tender
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El Salvador made history. On June 8, the Latin American country passed a bill that will officially make Bitcoin legal tender in their country.
El Salvador is officially the first country in the world to recognize Bitcoin as legal tender.
“The purpose of this law is to regulate bitcoin as unrestricted legal tender with liberating power, unlimited in any transaction, and to any title that public or private natural or legal persons require carrying out,” reads the law.
The law was passed by a supermajority in congress–62 out of 84 votes. As of now, the US dollar the legal tender of El Salvador. In 90 days, Bitcoin will be as well.
The new law has major implications for everyday Salvadorans.
As explained by Dchained, this decision has the potential to make the lives of Salvadorans easier. The ability to access money to purchase goods and services could become easier for people with a mobile device. As explained in the video above, some people with access to mobile devices will start to be able to function with Bitcoin in all aspects of life since it will now be a legal tender.
The news in El Salvador has a greater implication in Latin America. The potential financial inclusion and the opportunity for increased foreign investment could inspire other countries to follow suit. It also makes it easier for family members living in other parts of the world to send remittance back to their loved ones.
El Salvador’s president, Nayib Bukele, believes Bitcoin law will “will bring financial inclusion, investment, tourism, innovation and economic development for our country.”
According to the bill, 70% of Salvadorans do not have a bank account. Bitcoin Law would “open up” financial services to a large swatch of people who otherwise do not have access to bank services.
Proponents also believe that the law will help expat Salvadorans sent remittances (money sent home from abroad) to their family members–a financial act that makes up one fifth of the country’s GDP.
Per Yahoo! Finance, Bitcoin Law states that people will be able to use bitcoin to buy goods and services “unless a business cannot provide the tech required to facilitate the transaction.” People will also be able to pay their taxes in Bitcoin. The state of El Salvador will also help educate and train Salvadorans on using bitcoin.
Although proponents of Bitcoin are excited about this massive step for digital currency, some people are not so optimistic.
Skeptics believe that Nayib Bukele is using Bitcoin Law as a sort of PR stunt to distract from allegations of authoritarianism. Other people think Bukele has pushed the bitcoin agenda to be “popular on the internet”. Which, for the record, seems to be working.
Nayib Bukele, however, seems to be nonplussed. Since Bitcoin Law passed, he has announced a plan to “mine” Bitcoin by harnessing the power of a local volcano. Just don’t ask us how that works…
