Wed 09 June 2021:
El Salvador’s parliament has approved bitcoin as legal tender, President Nayib Bukele said.
The Salvadoran leader submitted the bill, which seeks to grant bitcoin the status of a legal tender, to the parliament on Tuesday.
“The #BitcoinLaw has been approved by a supermajority in the Salvadoran Congress. 62 out of 84 votes! History!” he tweeted after a vote late on Tuesday.
According to the bill, the legislation will regulate bitcoin and will grant it “liberating power, unlimited in any transaction, and to any title that public or private natural or legal persons require carrying out”.
El Salvador uses the US Dollar as Currency.
The bill also aims to facilitate financial inclusion to all citizens of El Salvador and promote economic growth.
The law passed with the support of Bukele’s allies despite minority opposition parties — who had criticised the speed of the vote — refusing to back it.
Before the vote, Bukele said adopting the cryptocurrency would bring “financial inclusion, investment, tourism, innovation and economic development” to the country.
The Salvadoran leader has hailed bitcoin as “the fastest growing way to transfer” billions of dollars in remittances and to prevent millions from being lost to intermediaries.
Remittances from Salvadorans working overseas represent a major chunk of the economy — equivalent to roughly 22 percent of Gross Domestic Product.
In 2020, remittances to the country totaled $5.9 billion, according to official reports.
In presenting the bill, Bukele asserts that the state is obligated to provide alternatives that allow people to carry out transactions in bitcoin and have “automatic and instant convertibility” into US Dollars.
The cryptocurrency market grew to more than $2.5 trillion in mid-May 2020, according to the Coinmarketcap page, driven by interest from increasingly serious investors from Wall Street to Silicon Valley.
But the volatility of bitcoin — currently priced at $33,814 — and its murky legal status has raised questions about whether it could ever replace traditional currency in day-to-day transactions.
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