El Salvador becomes world’s first nation to accept bitcoin as legal tender

El Salvador Congress has adopted a measure that would make Bitcoin legal tender in the country, according to its president, making it the world’s first nation to do so.

President Nayib Bukele tweeted after the voting that the #BitcoinLaw had been adopted by a qualified majority in the parliamentary assembly. He stated that the bill, which he submitted last week, was passed by a majority of 62 out of 84 legislators.

The bill was enacted with the backing of Bukele’s friends, despite the refusal of minority opposition parties, who had criticised the haste of the voting, to support it.

Prior to the referendum, Bukele stated that the cryptocurrency will offer the country financial inclusion, investment, tourism, innovation, and economic progress.

El Salvador’s president has praised bitcoin as the “fastest growing means to send” billions of dollars in remittances and save millions from being lost to intermediaries.

Remittances from Salvadorans working abroad account for a sizable portion of the economy, accounting for around 22 percent of GDP. According to official figures, remittances to the country totalled $5.9 billion in 2020.

This is a measure that will put El Salvador on the map, making it more appealing for international investment, according to Romeo Auerbach, deputy of the Grand Alliance for National Unity, a Bukele supporter.

According to the Coinmarketcap page, the cryptocurrency market expanded to more than $2.5 trillion in mid-May 2020, spurred by demand from more serious investors from Wall Street to Silicon Valley.

However, the volatility of bitcoin – which is now priced at $33,814 – as well as its uncertain legal status have generated concerns about whether it will ever be able to replace traditional cash in day-to-day transactions.

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