In a series of tweets, the 39-year-old PM said Bitcoin could help boost the economy. On the other hand, Bitcoin will have a “fast-growing opportunity to make $6 billion a year in remittances,” he said, adding that it would facilitate the transfer of money from one bank account to another and the exchange of goods and services. The quality of life for 70% of the population who do not have a bank account could also be improved by using Bitcoin.
Strike CEO and founder Jack Mallers said after the announcement: “The introduction of a native digital currency as legal tender provides El Salvador with an open payment network that integrates globally,” according to Reuters.
El Salvador wants to introduce laws that will make it the world’s first sovereign nation to introduce bitcoin as legal tender alongside the US dollar. At a conference in Miami over several days, billed as the biggest Bitcoin event in history, President Nayib Bukele announced plans to build the country’s modern financial infrastructure using Bitcoin technology. The plans announced by President Nayi Bukesle would make El Salvador the first country in the world to introduce the digital currency Bitcoin as legal tender against the dollar, according to a press release.
Bitcoin is a way to protect developing countries from the potential shocks of inflation from the currency, “Mallers said.
Mallers said on the main stage that the move would help create an open network that benefits individuals, businesses and public services.
He said El Salvador’s government had asked him to help develop plans for using Bitcoin. He said: ‘Bitcoin’s durability provides a way to protect developing countries from potential shocks such as currency inflation. Bukele’s video was presented at the event, which he said will go down in history as “the shot that you hear around the world for bitcoin.”
El Salvador’s bonds collapsed last week after Bukele’s party used the supermajority it won in February’s congressional elections to fire five top judges and the attorney general, drawing criticism from critics who saw it as a blatant power grab. Bukesle and his New Ideas party hold a majority of seats in the new Congress, which meets on May 1, giving the president’s proposed legislation a high chance of passing.
He said that a large proportion of the money transfers are currently lost to intermediaries and that Bitcoin could benefit more than a million low-income families. He also said that 70% of El Salvador’s population has no bank accounts and does not work in the informal economy.
While details are yet to be announced about how the currency will work in El Salvador, he told CNBC that they have assembled a team of Bitcoin leaders to help build a new financial ecosystem around Bitcoin as a base layer. In a statement, BitPay, a mobile payment app launched in El Salvador in March, said it welcomed the legislation and was working with the country to make the use of Bitcoin technology a success.
Legal tender is also part of commercial law, which is the basis of the legal system. It is a commercial term that means that citizens can accept a certain amount of money in exchange for goods or services, such as a payment obligation or exchange of goods supplied.
