The country’s President Nep Bukele said Tuesday that cryptocurrency bitcoin will become a legal form of payment in El Salvador. This means that this Central American country is the first country in the world to offer such a solution.
AFP said lawmakers passed a law on Tuesday making bitcoin a payment method in El Salvador. Thus cryptocurrency can be used from real estate purchases to tax payments.
President Bukele called the law “historic” on his Twitter account.
His enthusiasm, however, was not shared by the opposition parties, which accused him of the fact that the legislative process took place too quickly. “Bukele submitted the bill to the National Convention just one week ago,” a representative told AFP.
Funders are wondering how El Salvador, where nearly half of the people live in poverty, will popularize bitcoin as a working currency.
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President Bukele explains that virtual currency is the “fastest way to transfer” billions of dollars without losing millions due to intermediary transactions.
Agence France-Presse indicated that remittances from Salvadorans working abroad constitute a large part of the country’s budget, representing about 22% of the total. Gross Domestic Production. According to official reports, remittances to this country in 2020 amounted to 5.9 billion dollars.
Cryptocurrencies are popular due to their relative anonymity and fluctuations in value, which create opportunities for greater profits than investing in traditional global exchanges. However, the volatility of Bitcoin, which is currently valued at $33,814, and its unclear legal status raise doubts about whether it can actually replace traditional currencies in daily transactions.
DK / PAP