Bitcoin is set to become legal tender in El Salvador


El Salvador wants to make the cryptocurrency Bitcoin legal tender. President Nayib Bukele said in a video message to the Bitcoin 2021 Conference in Miami on Saturday that he will introduce a corresponding bill to Congress. “That will create jobs and integrate thousands of people into the formal economic cycle.”

According to the head of the payment service provider Zap, Jack Mallers, El Salvador would be the first country in the world to allow Bitcoin as legal tender. Bukele tweeted that Bitcoin has a market cap of $ 680 billion. If one percent of that is invested in El Salvador, the country’s gross domestic product would grow by 25 percent. In addition, Bitcoin would have 10 million more users, which would generate annual sales of 6 billion US dollars.

More than a million families would benefit from this, continued Bukele. 70 percent of Salvadorans do not have a bank account and work in the informal economy. These would be financially integrated into society through Bitcoin, they would have access to savings, loans and secure transactions.

Bitcoin is not controlled by a central bank, but created through mining, a decentralized and extremely energy-intensive process. The cryptocurrency is considered an object of speculation and is subject to violent price fluctuations. Therefore, in the opinion of most experts – for example the Bundesbank – Bitcoin is actually unsuitable as a means of payment.

El Salvador’s President Bukele likes to present himself as a modern and unconventional head of state. He is very present on social media and likes to give instructions to his ministers on Twitter. Critics see the 39-year-old’s authoritarian style of government as a threat to democracy. For example, it caused horror that he had soldiers march in parliament in February 2020. He wanted to put the MPs under pressure to approve the financing of his security concept with a loan. In the recent general election, his party emerged as the strongest force.


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