El Salvador will become the first country to accept cryptocurrency as a legal payment method. The country is set to be the world’s first country to officially declare Bitcoin legal tender. Nayib bukele the president of Salvadorian made the ground shaking declaration at the Miami Bitcoin conference 2021.
If ratified citizens of El Salvador will have the alternative of purchasing goods and services using bitcoin or the US dollar which is the official currency of cryptocurrency.
President bukele confirm this proposal, stating that “in the short period, this will generate job opportunity and assist financial infusion to thousand outside the formal economy).
“Bitcoin has a market cap of $680 billion dollars.
If 1% of it is capitalized in El Salvador, that would improve our GDP by 25%.
On the other side, #Bitcoin will have 10 million potential new users and the fastest growing way to transfer 6 billion dollars a year in remittances.
— Nayib Bukele 🇸🇻 (@nayibbukele) June 6, 2021”
The Salvadorian economy still depends on remittances, payments sent from Salvadorians living or working abroad. Presently, remittance makes up around 20% of the Salvadorian economy which is over $60 billion, and still, intermediaries receive a vast chunk of these funds in fees.
The introduction of bitcoin could drastically decrease the money lost to money services, and instead of putting more money into the pockets of Salvadorians. Besides, bitcoin can help resolve the issue of 70% of Salvadorians with no bank accounts.