El Salvador's President, Nayib Bukele, has announced that he will introduce legislation in Congress next week to make Bitcoin legal tender in the Central American country, citing the cryptocurrency's potential to enable Salvadorans working abroad to send remittances home. According to President Nayib Bukele, El Salvador is working on a measure to recognize bitcoin as legal tender.
If the bill passes, El Salvador will be the first country to establish a bitcoin standard. The entire text of the article was not immediately accessible.
Mr. Bukele said at a Bitcoin conference in Florida that "in the short term, this will produce jobs and help offer financial inclusion to those outside the formal sector," adding that it may also encourage investment in the country.
But it's unclear what is the "first bitcoin country" will imply for the Central American country, which is economically unstable and oppressively impoverished, with 70% of citizens lacking a bank account.
#Bitcoin has a market cap of 0 billion dollars.— Nayib Bukele 🇸🇻 (@nayibbukele) June 6, 2021
If 1% of it is invested in El Salvador, that would increase our GDP by 25%.
On the other side, #Bitcoin will have 10 million potential new users and the fastest growing way to transfer 6 billion dollars a year in remittances.
According to Statista, El Salvador's gross domestic output was $24.6 billion in 2020. Bukele stated that remittances are currently at a low level "Intermediaries lose a large portion of those 6 billion dollars (approximately Rs. 43,680 crores). The amount received by more than a million low-income families will increase by billions of dollars each year if Bitcoin is used."
He stated that 70% of the population of El Salvador does not have a bank account and works in the informal economy. Financial inclusion is not just a moral obligation, but also a means of boosting the country's economy by allowing citizens access to loans, savings, investments, and secure transactions, he added.