image courtsey/ NBC
After the approval of Congress President Nayib Bukele’s proposal to embrace the cryptocurrency, El Salvador has become the first country in the world to formally adopt bitcoin as a legal tender. On June 9 at 1pm IST Bitcoin price stood at Rs 24.5 lakhs.
Around 62 out of 84 votes a majority of law-makers voted for the initiative to create a law that will formally adopt Bitcoin, concerned about the potential impact on El Salvador’s programme with the International Monetary Fund.
The #BitcoinLaw has been approved by a supermajority in the Salvadoran Congress.
62 out of 84 votes!
History! #Btc🇸🇻
— Nayib Bukele 🇸🇻 (@nayibbukele) June 9, 2021
The use of Bitcoin for its potential to help Salvadorans living abroad to send money order back home, while saying the US dollar will also continue as legal tender.
Just before the vote in congress Bukele tweeted that, “It will bring financial inclusion, investment, tourism, innovation, and economic development for our country.” It is controlled by his parties and allies.
He also added that the use of Bitcoin, whose use will be optional, would not bring risks to users. Its use as legal tender will go into law in 90 days.
It also stated that “The government will guarantee the convertibility to the exact value in dollars at the moment of each transaction.”
Experts also mentioned that the move to Bitcoin could complicate talks with the IMF, where El Salvador is seeking a more than $1 billion (around Rs 7,300 crores) programme.
During the 5th GDP in 2019 El Salvador’s dollarised economy relies heavily on money sent back from workers abroad.
World Bank data showed money-order to country’s made up nearly $6 billion (roughly Rs. 43,790 crores) which became one of the highest ratios in the world.