Bitcoin: How El Salvador intend to Make Bitcoin a Legal Tender.
It emerged towards the end of this past week that a bill to make Bitcoin a Legal Tender in El Salvador is in place, a country where over 70% of the population is underbanked.
Before now, the economy of El Salvador has been dwindling due to pressures from Central banks and the US federal reserve according to the President of El Salvador. The bill’s approval would likely make El Salvador the first nation to adopt a Bitcoin standard.
Interestingly, El Salvador boasts a gross domestic product of about $24.6 billion in 2020 according to Statista. President Bukele of El Salvador claims that this plan will have immediate short term benefits for unbanked individuals as well as generate jobs.
President Bukele lamented the negative impact of central banks actions on the economic stability of El Salvador “In order to mitigate the negative impact from central banks, it becomes necessary to authorize the circulation of a digital currency with a supply that cannot be controlled by any central bank and is only altered in accord with objective and calculable criteria.”
It’s important to note that some Bitcoin merchants have made inroads in El Salvador such as the Mallers’ Strike, a payments app built on Bitcoin’s Lightning Network, has been on the ground in El Salvador this year, with Maller claiming to onboard 20,000 Salvadorans a day during the app’s peak activity in the country.
In conclusion, the goal is simple, onboard unbanked individuals greatly affected by Central Bank monetary inflation thus making cross border payments free or less expensive as this goes a long way to solve remittance problems experienced in the modern-day banking system, Maller said. When this becomes a reality, It’ll go down as part of the history-making event of Bitcoin making El Salvador the first country to formally and legally recognize Bitcoin for use in everyday transactions, remains to be seen the overall impact of this move as we all hope for a positive outlook in the long run but for now, it still remains bullish on all fronts for Bitcoin.
Stay bullish, hold Bitcoin.