El Salvador is a country in central America
El Salvador has turned out to be the first country in the world to formally take bitcoin as legal tender after Congress approved President Nayib Bukele’s proposal to embrace the cryptocurrency.
After getting 62 out of 84 possible votes, a majority of lawmakers voted in favor of the initiative to basically make a law that will legally adopt bitcoin, despite having concerns over the potential impact on El Salvador`s program with the International Monetary Fund.
Bukele has touted the use of bitcoin for its potential to offer help to Salvadorans living abroad to send remittances, while saying the US dollar will happen as legal tender.
“It will bring financial inclusion, investment, tourism, innovation and economic development for our country,” Bukele said in a tweet shortly before the vote in Congress, which is controlled by his party and allies.
He further added that the use of bitcoin will be optional and it would not bring risks to users. Its use as legal tender will go into law in 90 days.
“The government will guarantee the convertibility to the exact value in dollars at the moment of each transaction,” Bukele said.
El Salvador`s main economy completely depends 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.
Experts have said the move to bitcoin could complicate talks with the IMF, where El Salvador is seeking a more than $1 billion program.