Bitcoin Formally Adopted as Legal Tender in El Salvador, First Country in the World to Do So

Bitcoin as legal tender “will bring financial inclusion, investment, tourism, innovation and economic development for our country,” President Nayib Bukele said.

By Reuters | Updated: 10 June 2021 11:07 IST

Bitcoin Formally Adopted as Legal Tender in El Salvador, First Country in the World to Do So

Bukele touted use of Bitcoin for its potential to help Salvadorans to send remittances back home

Highlights

Bukele added that the use of Bitcoin will be optional
Its use as legal tender will go into law in 90 days
El Salvador's economy relies on money sent back from workers abroad

El Salvador has become the first country in the world to formally adopt Bitcoin as legal tender after Congress approved President Nayib Bukele's proposal to embrace the cryptocurrency.

With 62 out of 84 possible votes, a majority of lawmakers voted in favour of the initiative to create a law that will formally adopt Bitcoin, despite concern about the potential impact on El Salvador's programme with the International Monetary Fund. Bitcoin price in India at 1pm IST on June 9 stood at Rs. 24.5 lakhs.

The #BitcoinLaw has been approved by a supermajority in the Salvadoran Congress.

62 out of 84 votes!

History! #Btc????????
— Nayib Bukele ???????? (@nayibbukele) June 9, 2021

Bukele has touted the use of Bitcoin for its potential to help Salvadorans living abroad to send remittances back home, while saying the US dollar will also continue as legal tender.

"It will bring financial inclusion, investment, tourism, innovation, and economic development for our country," Bukele said in a tweet shortly before the vote in Congress, which is controlled by his party and allies.

Samsung Wins Patent for a Tri-Fold Smartphone With Specialised Barrier Layer for Improved Durability

He added that the use of Bitcoin, whose use will be optional, would not bring risks to users. Its use as legal tender will go into law in 90 days.

"The government will guarantee the convertibility to the exact value in dollars at the moment of each transaction," Bukele said.

El Salvador's dollarised economy relies heavily on money sent back from workers abroad. World Bank data showed remittances to the country made up nearly $6 billion (roughly Rs. 43,790 crores) or around a fifth of GDP in 2019, one of the highest ratios in the world.

El Salvador President Offers Incentives for Crypto Community

Experts have said the move to Bitcoin could complicate talks with the IMF, where El Salvador is seeking a more than $1 billion (roughly Rs. 7,300 crores) programme.

© Thomson Reuters 2021

Interested in cryptocurrency? We discuss all things crypto with WazirX CEO Nischal Shetty and WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.

Affiliate links may be automatically generated - see our ethics statement for details.

Cryptocurrency Prices across Indian exchanges

Comments

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.