El Salvador has turned out to be the first country in the world to grant legal tender status to bitcoin. The Central American country approved a bill today marking the world’s largest cryptocurrency, Bitcoin as legal tender. Its adoption as legal tender will go into law in 90 days.
The historic moment rose after President Nayib Bukele on June 5 moved a bill to Congress regarding the same. Taking to his Twitter he disclosed the news. He informed that the law was passed with a majority vote of 62 out of 84. Reacting to the news, Martijn Bolt, the Blockchain Implementation Specialist said that in the future, El Salvador will turn into a financial powerhouse.
In the Bitcoin 2021 conference in Miami, he had mentioned that it would generate jobs in the short term and provide financial inclusion to thousands outside the formal economy.
Furthermore, he clarified that US Dollar will also continue to be a legal tender and use of Bitcoin will be optional, adding that it would not bring risk to users. He also informed that the government will guarantee the convertibility to the exact value in dollars at the moment of each transaction.
El Salvador’s dollarized economy relies heavily on money sent back from workers abroad. World Bank data showed remittances to the country made up nearly $6 billion or around a fifth of GDP in 2019, one of the highest ratios in the world.
Meanwhile, the experts doubt that the development might complicate talks between El Salvador and the International Monetary Fund (IMF), from whom it is seeking more than $1 billion.