As published on nfcw.com, Friday 11 June, 2021.
El Salvador has become the first country in the world to adopt bitcoin as legal tender, allowing citizens to use the cryptocurrency to make payments for goods and services as well as pay their tax bills and receive remittances from abroad.
The Salvadoran president Nayib Bukele announced the news in a tweet after the national Congress approved the bitcoin law he proposed by “a supermajority”.
The US dollar will also continue to be used as legal tender in El Salvador, and although using bitcoin will be “absolutely discretionary”, the law states that companies must accept payments in the cryptocurrency when they are offered.
“The upcoming introduction of the cryptocurrency bitcoin in the country will bring with it a series of investment incentives and new technologies that will give the country an additional boost in its economic activity,” the president’s official website says.
“Among the actions that the president announced, prior to the presentation of the bill, are permanent residence for those who start bitcoin-related ventures, incentives via taxation and an attractive climate.
“He also announced that the Blockstream company will install satellite technology to facilitate internet connection in those places where current providers have a poor signal. With greater coverage, more people will be able to start doing business using bitcoin, even if they are not formalized.”
Bukele has also announced that the country is partnering with digital wallet provider Strike to implement a financial infrastructure built on bitcoin technology.
“This is the shot heard ’round the world for bitcoin,” Strike founder Jack Mallers told the Bitcoin 2021 conference after Bukele revealed he was intending to propose a “bitcoin law” in El Salvador.
“What’s transformative here is that bitcoin is both the greatest reserve asset ever created and a superior monetary network. Holding bitcoin provides a way to protect developing economies from potential shocks of fiat currency inflation.
“Additionally, adopting a natively digital currency as legal tender provides El Salvador the most secure, efficient and globally integrated open payments network in the world.”