El Salvador becomes world’s first country to make Bitcoin a legal tender
- IBJ Bureau
- Jun 09, 2021
El Salvador President Nayib Bukele has said that the nation has adopted Bitcoin as legal tender, a step he believes will create jobs and promote financial inclusion. Ms Bukele, Latin America’s youngest president who is known to break from the norms, has said on Twitter that lawmakers have approved the legislation by a “supermajority”.
The 39-year-old leader had previously said that Bitcoin could boost the economy, help counter El Salvador’s low banking penetration rate and facilitate faster transfers for $6 billion of remittances a year. The move to make the virtual coin a legal tender is a rare slice of good news for the largest cryptocurrency, which is struggling to recover from a rout in May.
El Salvador’s central bank President Douglas Rodriguez had said in an interview with State TV on Tuesday that Bitcoin was already used in the country and “it’s not something people need to be afraid of”, while adding that it would not replace the US dollar.
Bitcoin has roughly halved from a mid-April record of almost $65,000, hurt in part by billionaire Elon Musk’s criticism of the amount of energy needed by the servers underpinning it. Harsher regulatory scrutiny in places such as China has also soured sentiment, and the idea that more mainstream investors will warm up to it has taken a knock. But the Bitcoin faithful say that these are temporary setbacks and that the virtual currency’s role will expand.