El Salvador to accept Bitcoin as legal tender

El Salvador President Nayib Bukele announced that the country will soon accept Bitcoin as legal tender in a virtual speech posted on his Twitter account on June 6. The speech was played at a Bitcoin conference in Miami, Florida, United States last June 3 to 5.

During the speech, Bukele expressed his plans of drafting legislation to make Bitcoin one of the official currencies in the country alongside the US Dollar. This move will make El Salvador the first country to accept cryptocurrency as a legal currency.

‘In the short term, this will generate jobs and help provide financial inclusion to thousands outside the formal economy and in the medium and long term, we hope that this small decision can help us push humanity at least a tiny bit into the right direction,’ Nayib said in his speech.

The cryptocurrency bill will still be reviewed by the country’s congress for approval. Should the proposed legislation pass, it’ll open up financial services to 70% of Salvadorans without bank accounts, according to Bukele.

‘We hope that this decision will be just the beginning in providing a space where some of the leading innovators can reimagine the future of finance, potentially helping billions around the world,’ Bukele said.

The Central American country’s economy relies heavily on remittances sent by overseas Salvadorians to their families. In 2020, El Salvador accounted for US$6 billion in remittances alone.

Bukele said that adopting Bitcoin to its financial systems could help lessen money transfers lost in overhead payment to intermediaries. This move would benefit more than a million low-income families in the country, he added.

Bukele partnered with Jack Mallers, chief executive officer (CEO) and founder of Strike, a large-scale Bitcoin and lightning payments provider based in the US. The partnership is said to help El Salvador build a modern financial infrastructure centred on Bitcoin technology and transition to Bitcoin payments legally.

‘Adopting a natively digital currency as legal tender provides El Salvador the most secure, efficient and globally integrated open payments network in the world,’ said ‘Holding bitcoin provides a way to protect developing economies from potential shocks of fiat currency inflation,’ Mallers said during his opening remarks at the Bitcoin conference.

Since Bukele started his term last May 1, his New Ideas party earned trust and popularity among Salvadorans. The president currently holds the supermajority in congress, making it possible for the crypto bill to get approved in the coming months.

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