If approved, El Salvador would become the first country in the world to officially recognize cryptocurrency as legal tender.
El Salvador may become the first country to declare Bitcoin a legal tender after President Nayeb Bukel announced that it would soon propose a bill that could transform a remittance-dependent economy.
The move will make the Central American nation the first in the world to officially recognize cryptocurrency as legal tender, “allowing the financial inclusion of thousands of people outside the legal economy,” Bookel said on Saturday.
“Next week I will send a bill to Congress that makes Bitcoin legal money,” he said in a video address to the Bitcoin 2021 conference in Miami.
He said the bill aims to create jobs in a country where “70 percent of the population does not have a bank account and works in an informal economy.”
– Nayib Bukele (@nayibbukele) June 5, 2021
The government has yet to provide details on the bill, which will require parliamentary approval, dominated by the president’s allies.
Remittances from El Salvador represent the bulk of the economy, accounting for about 22 percent of gross domestic product (GDP).
Last year, according to official reports, remittances to the country totaled $ 5.9 billion.
The Strike mobile payment program, launched in El Salvador in March, said in a statement that it welcomed the legislation and was working with the country to make the use of Bitcoin technology a success.
“This is a shot that can be heard all over Bitcoin for the world,” Strike co-founder and CEO Mal Eck Mullers was quoted as saying at the Miami conference, presenting a video of Buckel.
“Naturally, the adoption of digital currency as a legal means provides El Salvador with the safest, most efficient, globally integrated open payment network in the world,” Mullers said.
According to CoinMarketCap, the cryptocurrency market grew to more than $ 2.5 trillion in mid-May 2020 due to the interest of more and more serious investors from Wall Street to Silicon Valley.
But the volatility of Bitcoin – currently priced at $ 36,127 – and its murky legal status have raised questions about whether it can ever replace the fiat currency in day-to-day transactions.