Bitcoin investors were thrilled by the news of El-Salvador making bitcoin a legal tender. El-Salvador becomes the first country to adopt bitcoin as a legal currency.
The Central American country becomes the first country to legalize bitcoin. President Nayib Bukele moved the proposal in congress regarding the adoption of crypto’s poster child. 62 out of 82 members of congress voted in the favour of making bitcoin a legal tender. El Salvador’s program with the International Monetary Fund (IMF) may bear the brunt of this decision.
The Crypto enthusiasts were tweeting vigorously regarding this decision on Wednesday. Cryptocurrencies and especially bitcoin dropped significantly in value over the past month. BTC received a backlash from politicians and other environmental activists for being bad for the environment due to its energy-consuming mining process. However, the adoption by El- Salvador brought the price of bitcoin back to $36K.
President Bukele is of the opinion that Bitcoin will help in boosting remittances sent back home by Salvadorans residing abroad. The country relies heavily on money sent by expatriates. In 2019, $6 billion worth of remittances made up 5 % of the country’s GDP.
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In theory, crypto provides a fast transaction processing facility. Moreover, it is a cheap source of sending money across the border. El Salvador is adopting bitcoin for this and multiple other reasons. Mr. Bukele said in a tweet before voting in congress,
It will bring financial inclusion, investment, tourism, innovation, and economic development for our country.
El Salvador becomes the first country to adopt bitcoin in the capacity of legalized currency. Nonetheless, individuals will have the option to choose between bitcoin and US Dollar.
The president also announced that El Salvador will offer citizenship to anyone who shows evidence of having invested in at least three bitcoins.
The use of bitcoin as legal tender in the country will start in 90 days. All forms will have to accept the currency if paid for goods and services.