Bitcoin Could Soon Be Legal Tender in El Salvador

World leaders have expressed varying degrees of fascination, hostility, and befuddlement towards cryptocurrency and its often volatile nature. But El Salvador’s President Nayib Bukele just submitted the ultimate vote of confidence. On Saturday, President Bukele said he will introduce a…

Jennifer
Image Credit: iStock Images, bodnarchuk
Sign up for insightful business news.

World leaders have expressed varying degrees of fascination, hostility, and befuddlement towards cryptocurrency and its often volatile nature. But El Salvador’s President Nayib Bukele just submitted the ultimate vote of confidence.

On Saturday, President Bukele said he will introduce a bill this week to make his country the first to adopt Bitcoin as legal tender.

It’s a Shoo-In

Bukele’s New Ideas party has a strong majority in El Salvador’s Legislative Assembly – so passing his Bitcoin bill should be a relative breeze.

What makes cryptocurrency especially appealing to El Salvador’s developing economy is, unlike cash holdings, it doesn’t require a bank account. So digital wallets can boost financial flexibility in poorer communities without a BancoAgrícola branch on every corner.

  • El Salvador, which uses the U.S. Dollar as its currency, is a mostly cash economy. About 70% of people have no bank account or credit card. Remittances, or money sent home by people who emigrated to other nations, accounts for over 20% of GDP.
  • But El Salvador also has one of the highest mobile penetration rates in all of Central and South America: there’s 147 mobile cellular subscriptions for every 100 people, and two thirds of the country is on social media.

In other words, it’s a population primed for digital money.

Cash-Out

While it’s unclear how Bitcoin would be phased into El Salvador’s economy, the government recruited a team of crypto movers and shakers to help mold a new financial ecosystem, with Bitcoin as the bedrock.

“What’s transformative here is that Bitcoin is both the greatest reserve asset ever created and a superior monetary network,” says Jack Mallers, founder of payments platform Strike and one of those movers and shakers. “Holding Bitcoin provides a way to protect developing economies from potential shocks of fiat currency inflation.”

America Second: The U.S. will soon have a bit more clarity on its own crypto future: the Federal Reserve said it will publish a paper this summer laying out the benefits and risks of a digital U.S. Dollar.

Analysis more

Tale of the Tape: Warren Buffett and Cathie Wood

Farm Strong: Understanding Agriculture as an Investment

Recent News

Consumer Confidence Rises in Spite of Challenged Conditions

Wall Street’s WhatsApp Habit Could Cost it $2 Billion in Penalties

Hertz and BP Partner to Install Thousands of EV Chargers; Gov’t Funds Its Own Network

175 Offshore Gambling Operations in the Philippines are About to Be Shut Down

[subscribe-form listid="1ebbb697aaa44fb1971fe0a3c42ff841" source="organic" medium="organic" redirect-url="https://thedailyupside.com/thank-you/"]
<form action="" class="subscribe-form "> <input type="text" name="subscribe_form_email" placeholder="Enter your email"> <input type="text" name="subscribe_form_name" placeholder="Enter your name" value="" class="c-subscribe-from_field"> <button class="c-btn" id="subscribe-form-submit" type="submit">Subscribe</button> <div class="subscribe-form-message"></div> <div class="subscribe-form-vars"> <input type="hidden" class="subscribe-form-param" name="params[listid]" value="1ebbb697aaa44fb1971fe0a3c42ff841"> <input type="hidden" class="subscribe-form-param" name="params[source]" value="organic"> <input type="hidden" class="subscribe-form-param" name="params[medium]" value="organic"> <input type="hidden" class="subscribe-form-param" name="params[redirect_url]" value="https://thedailyupside.com/thank-you/"> </div> </form>