Crypto News
| Published On Jun 9, 2021 12:44 pm CEST  |  Updated on Aug 3, 2021 5:42 pm CEST | By Peter Siu

El Salvador becomes first country in the world to make Bitcoin a legal tender

Share

El Salvador has become the first country in the world to adopt bitcoin as legal tender after its Congress on Wednesday approved President Nayib Bukele’s proposal to embrace the cryptocurrency.

Following the move that delighted Bitcoin supporters all around the world, El Salvador Congress voted in favor of the law proposal with 62 out of 84 possible votes. In the process, country lawmakers ignored potential impact on El Salvador’s program with the International Monetary Fund.

Remittances

Bukele has touted the use of bitcoin for its potential to help Salvadorans living abroad to send remittances back home. Currently, the majority of remittances are made thru Western Union, who take up to 30% commission per transaction. El Salvador, that does not have its own currency, will continue using the U.S. dollar as legal tender

In a tweet shortly before the vote in Congress, Bukele said that Bitcoin as a legal tender “will bring financial inclusion, investment, tourism, innovation and economic development for our country”.

250% Extra + $125 Free Chip!
New players only. 250% on 1st Deposit + $125 Free Chip
Casino

Volcanic mining

Bukele later said he had instructed state-owned geothermal electric firm LaGeo to develop a plan to offer bitcoin mining facilities using renewable energy from the country’s volcanoes.

The plans to build a bitcoin mining hub around the country’s geothermal potential were welcomed by Jack Dorsey and confirm his company’s claims of Bitcoin as catalyst for the change to renewable energy.

Bukele also said that El Salvador would offer citizenship to people who invest at least three bitcoins in the country

Get 125% / $2,500 on 1st deposit!
New players only. Exclusive Welcome Bonus of up to $2,500
Casino & Sports

Individuals have the option to use Bitcoin and will not be susceptible to risks, Bukele said. The government will guarantee convertibility to dollars at the time of transaction through a $150 million trust created at the country’s development bank BANDESAL.

Under the new law, though, the top cryptocurrency must be accepted by firms when offered as payment for goods and services. Tax in the country can now also be paid in Bitcoin.

In an online conversation Bukele had with crypto insiders, he had previously said:

“If you go to a McDonald’s or whatever, they cannot say we’re not going to take your bitcoin, they have to take it by law because it’s a legal tender.”

Bukele further revealed that the El Salvador government and Central Bank do not hold any bitcoin at the moment.

Bitcoin’s use as legal tender will begin in 90 days, and the Bitcoin-dollar exchange rate set by the market.

177% up to 5BTC + 77 Free Spins!
New players only. Exclusive Welcome Bonus of 177% + 77 Free Spins
Casino

Who is next?

Cryptocurrency supporters hailed Bukele’s move. What the impact will be on bitcoin regulation, taxation or adoption in other countries is something we are all eagerly awaiting.

Although rumours are out of Paraguay, Argentina following suit in the same continent, there are no immediate signs of that as of yet

According to analysts, the move could complicate talks with the IMF, where El Salvador applied for a $1 billion program.

Bukele will meet with the IMF on Thursday to discuss the Bitcoin law and other issues, stressing that the country’s new regulation was “not going to change their macroeconomics.

Bitcoin’s price jumped Wednesday by the most in two weeks. The cryptocurrency was trading around $36,500 at time of writing, having picked up from the $31,000 range on Tuesday. 

Peter Siu

Peter is a former poker-pro, turned crypto enthusiast with 8+ years’ experience in operational roles dealing with all online gaming verticals within large iGaming companies, including Flutter and Entain. Now an expert in the field of Sports Betting, Casino, iGaming, and Poker, he is our team leader and editor. When not working, Peter can be found in the gym or playing sports like football, tennis and more recently padel.

Tags: Bitcoin