El Salvador President wants to make bitcoin legal tender
El Salvador’s President Nayib Bukele recently announced that he will send a bill to Congress to make bitcoin legal tender in the country.
In a report by Reuters, Bukele said that bitcoin can help Salvadorans living abroad to send remittances home. In short term, it can also help generate jobs and provide financial inclusion to thousands outside the formal economy. He also pointed out the 70% of El Salvador’s population does not have a bank account and works in the informal economy.
When it comes to remittances, Bukele said that “a big chunk of those 6 billion dollars is lost to intermediaries. By using Bitcoin, the amount received by more than a million low-income families will increase in the equivalent of billions of dollars every year.”
Strike, a mobile payments app that launched in El Salvador in March supports the legislation and is working with the country to make using bitcoin a success.
“Adopting a natively digital currency as legal tender provides El Salvador the most secure, efficient and globally integrated open payments network in the world,” said Strike founder and CEO Jack Mallers.
In a separate article, Reuters reported El Salvador’s top official said that the U.S. dollar would continue to be legal tender and that bitcoin transactions would be by choice and tied to the dollar exchange rate.
Trade and Investment Minister Miguel Kattan said bitcoin was already in limited use in El Salvador, as customers can now use it to buy pupusas, the national street snack.
While there is support to the move, some analysts see problems like the possible complication or delay to the country’s discussions with the IMF as the former seeks a more than USD 1 billion program.
Justin Sun, founder and CEO of TRON, said that his firm would become the “first crypto organization” to establish an office in El Salvador. TRON is a Blockchain-based decentralized operating system based on a cryptocurrency native to the system, known as TRX.