El Salvador has accepted the popular cryptocurrency Bitcoin as legal tender, becoming the world’s first country to do so. 62 members of the country’s Congress voted in favor of the bill, while 19 members opposed and 3 abstained.  As of now, the country’s citizens can freely spend and use Bitcoin along with the U.S. dollar, which is the country’s official currency.

The news came just after the 39-year-old president of El Salvador, Nayib Bukele, broadcast his intentions to make Bitcoin legal currency at the Bitcoin 2021 conference in Miami. In a tweet, President Bukele pointed out that at a market cap of $680 billion, if 1% of Bitcoin is invested in El Salvador, the country would see its GDP increase by 25%.

Zoom Out: The country’s economy is highly dependent on remittances, amounting to $5.9 billion last year, 22% of its GDP. On the other hand, approximately 70% of El Salvador does not have access to traditional financial services. Therefore, the country is partnering with Strike, a cryptocurrency tech company that enables real-time Bitcoin transfers, to build the country’s new financial infrastructure. The move will usher in a new era of financial inclusion for Salvadorans without a bank account and create a fast and straightforward way to transfer remittances for the whole nation

Share this post