Five reasons El Salvador want to accept Bitcoin as a legal tender
El Salvador President Nayib Bukele made the announcement on Saturday that he will introduce a bill to Congress this week for the country to formally adopt the bitcoin as a legal tender:
El Salvador President Nayib Bukele made the announcement on Saturday that he will introduce a bill to Congress this week for the country to formally adopt the bitcoin as a legal tender: this, however, is in hopes that being the first country to officially use the cryptocurrency will attract investment and allow more residents to take part in the formal economy.
The bill must still be reviewed by the country’s legislative assembly before it becomes law. But with the populist Bukele’s upstart political party in firm control of that body, approval seemed all but assured Saturday afternoon
Here are five reasons El Salvador may likely want to accept Bitcoin as a legal tender.
- Bitcoin could be an innovative idea that could launch El Salvador into a more optimistic future, Bukele said Saturday during a virtual speech to a bitcoin convention in Miami, Florida.
- Adopting bitcoin in the short term would create jobs and provide financial inclusion to thousands outside the formal economy, Bukele said, like the 70% of Salvadorans who do not have a bank account but did not give specifics on how the new policy would work.
- It could also attract investment, Bukele said—with a market cap of $680 billion if just 1% of bitcoin is invested in El Salvador, the country’s GDP would surge by 25%.
- Bukele argued bitcoin would be particularly useful in El Salvador, as roughly one-fourth of the country’s GDP comes from money sent home by the millions of El Salvador citizens who work abroad and send back more than $6 billion per year.
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Adopting bitcoin as legal tender would help more than a million low-income families in El Salvador avoid paying fees to intermediaries when they receive money from family members abroad, Bukele said.
#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.
— Nayib Bukele ?? (@nayibbukele) June 6, 2021
Moreso, Bukele has teamed up with digital wallet Strike and is working with CEO Jack Mallers to help the country legally adopt bitcoin. El Salvador has used the U.S. Dollar as its official currency since 2001.
READ ALSO: President of El Salvador says he’s submitting Bill to make Bitcoin legal tender
Bukele’s New Ideas party and allies won a supermajority during the March midterm elections. Critics have expressed concern about the notoriously volatile nature of bitcoin prices and the massive amount of energy bitcoin burns. El Salvador is the smallest country in South America, and nearly 40% of the population lives below the poverty line.
