The move, if approved, would make El Salvador the first country in the world to formally accept cryptocurrency as legal tender.
El Salvador could become the first country to get legal currency from Bitcoin after President Nayib Bukele announced he would soon propose a bill that could transform the remittance-dependent economy.
That decision would make the Central American nation the first in the world to formally accept cryptocurrency as legal tender and “allow the financial inclusion of thousands of people who are outside the legal economy,” Bukele said Saturday.
“Next week I will send Congress a bill to make legal money from Bitcoin,” he said during a video message at the Bitcoin 2021 conference in Miami.
He said the bill wants to create jobs in a country where “70 percent of the population does not have a bank account and works in the informal economy.”
– Nayib Bukele 🇸🇻 (@nayibbukele) June 5, 2021
The government has not yet given details of the bill, which will require the approval of a parliament dominated by the president’s allies.
Remittances from Salvadorans working abroad account for a significant share of the economy, equivalent to about 22 percent of gross domestic product (GDP).
Last year, remittances in the country amounted to $ 5.9 billion, according to official reports.
Strike, a mobile payment app that launched in El Salvador in March, said in a statement that it welcomed the legislation and was working with the country to make Bitcoin technology a success.
“This is the feature heard around the world by Bitcoin,” said Strike founder and CEO Jack Mallers, who presented the Bukele video at the Miami conference.
“The adoption of a native digital currency as the legal tender currency provides El Salvador with the most secure, efficient and globally integrated open payments network in the world,” Mallers said.
According to the CoinMarketCap page, the cryptocurrency market grew to more than $ 2.5 trillion by mid-May 2020, driven by the interest of increasingly serious investors from Wall Street to Silicon Valley.
But the volatility of Bitcoin, which is currently priced at $ 36,127, and its murky legal status have raised questions about whether it could ever replace fiat currency in day-to-day transactions.