Connect with us

Business

For the first time in the world, El Salvador turns Bitcoin into legal tender By Reuters

Published

on

For the first time in the world, El Salvador turns Bitcoin into legal tender By Reuters
© Reuters. FILE PHOTO: Bitcoin banners are seen outside a small restaurant on El Zonte beach in Chiltiupán, El Salvador, June 8, 2021. REUTERS / José Cabezas / File Photo

By Nelson Renteria, Tom Wilson and Karin Strohecker

SAN SALVADOR (Reuters) -El Salvador has become the first country in the world to adopt bitcoin as legal tender after Congress approved President Nayib Bukele’s proposal to adopt cryptocurrency.

With 62 out of 84 possible votes, lawmakers voted in favor of the measure to create a law to adopt bitcoin, despite concerns about the potential impact on El Salvador’s program with the International Monetary Fund.

Bukele has touted the use of bitcoin for its potential to help Salvadorans living abroad send remittances back home, while saying that the US dollar will continue as legal tender as well.

“It will bring financial inclusion, investment, tourism, innovation and economic development to our country,” Bukele said in a tweet shortly before the vote in Congress, which is controlled by his party and allies.

The use of bitcoin will be optional for individuals and will not present risks to users, Bukele said, and the government will guarantee convertibility to dollars at the time of the transaction through a trust created in the country’s development bank BANDESAL.

By law, businesses must accept bitcoins when they are offered as payment for goods and services. Tax contributions can also be paid in cryptocurrency.

Its use as legal tender will begin in 90 days, with the bitcoin-dollar exchange rate set by the market.

Cryptocurrency supporters hailed the move as legitimating the emerging asset, but its impact on regulation, taxation, or bitcoin adoption in other countries remains to be seen.

Still, there were no immediate signs that other countries would follow El Salvador’s adoption of bitcoin.

“If this becomes the first of what becomes a trend and then snowballs, or if it will be a problem, we will only know through history,” said Brandon Thomas, a partner at the firm. Grayline Group Consulting.

Analysts have also said the move could complicate talks with the IMF, where El Salvador is seeking a more than $ 1 billion program.

He enjoyed his best day in two weeks, climbing as much as 6% to $ 35,200.

“The market will now focus on adoption through El Salvador and if other nations will follow,” said Richard Galvin of crypto fund Digital Asset Capital Management. “This could be a key catalyst for bitcoin for the next two to three years.”

REMITTANCES

Emerging economies, where bank penetration is much lower than in developed countries and dependence on money transfers from abroad is much higher, have quickly warmed up to cryptocurrencies.

Outside of the United States, the countries with the highest volumes of cryptocurrency production and trade are all developing countries, according to BofA, including China, Colombia and India.

But the use of digital currencies in general can also pose risks for dollarized economies, which have adopted foreign currencies as legal tender, such as El Salvador, he added.

Dollarization “is a major problem for macroeconomic and financial stability in many emerging markets, and it could work if digitization facilitates access to foreign currencies,” said David Hauner of BofA.

“The root cause of dollarization is high local inflation, which could also worsen if digital currencies turn out to be inflationary.”

El Salvador relies heavily on money sent by workers abroad. Data from the World Bank showed that remittances to the country accounted for nearly $ 6 billion or about a fifth of GDP in 2019, one of the highest rates in the world.

It is not clear what proportion of the remittances sent to El Salvador are in the form of bitcoin.

Cryptocurrency offers, in theory, a fast and inexpensive way to send money across borders without relying on the remittance companies that are typically used for such transactions.

But that has worried financial regulators and lawmakers, who warn that Bitcoin facilitates money laundering and other illicit uses.

Still, its use for remittances is irregular. Converting local currencies to and from bitcoin often relies on informal brokers, while trading often demands technical knowledge.

Bukele says that around 70% of people in El Salvador lack access to traditional financial services.

El Salvador will promote training and mechanisms to allow access to bitcoin transactions, the law said.

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Advertisement
Advertisement

Lifestyle

The 7 best epic novels you will want to read and reread over and over again The 7 best epic novels you will want to read and reread over and over again
LifeStyle11 hours ago

The 7 best epic novels you will want to read and reread over and over again

Despite concerns about the early pandemic that eventually run out of good TVHonestly, I don’t feel like we’ve ever done...

6 small patio design ideas to make the most of your space 6 small patio design ideas to make the most of your space
LifeStyle11 hours ago

6 small patio design ideas to make the most of your space

I think we can all agree that this summer More than ever We are excited to do each and every...

Food delivery companies are popping up in S’pore, but complaints are on the rise Food delivery companies are popping up in S’pore, but complaints are on the rise
LifeStyle12 hours ago

Food delivery companies are popping up in S’pore, but complaints are on the rise

It seems that negative comments about food delivery companies abound online. A quick glance at the Facebook pages of the...

How are delivery-only food and beverage brands affected in cloud kitchens during MCO? How are delivery-only food and beverage brands affected in cloud kitchens during MCO?
LifeStyle13 hours ago

How are delivery-only food and beverage brands affected in cloud kitchens during MCO?

With dinners banned during closures, many restaurants have had to switch online and offer their wares through delivery and takeout....

Malaysian indie game developer behind The Company Man Malaysian indie game developer behind The Company Man
LifeStyle14 hours ago

Malaysian indie game developer behind The Company Man

At a time when many of us are WFH and lacking office culture (or not, there is no judgment here),...

Coworking and coliving hotel in Gua Musang, Kelantan Coworking and coliving hotel in Gua Musang, Kelantan
LifeStyle16 hours ago

Coworking and coliving hotel in Gua Musang, Kelantan

Only recently have we noticed new coworking space launches in Klang Valley slowing down. Considering the pandemic and travel restrictions,...

4 Nutritionist Approved Healthy Foods on Amazon to Update Your Pantry 4 Nutritionist Approved Healthy Foods on Amazon to Update Your Pantry
LifeStyle1 day ago

4 Nutritionist Approved Healthy Foods on Amazon to Update Your Pantry

In a dream world, healthy, nutrient-dense meals would be easily accessible to everyone. Buying quinoa, leafy greens, and other superfoods...

Where the magic of Tata Harper happens Where the magic of Tata Harper happens
LifeStyle1 day ago

Where the magic of Tata Harper happens

Tata Harper is famous for doing most of the manufacturing of her clean, natural skincare on her farm in Vermont,...

The Best Summer Pasta Salad Recipe You Must Try This Season The Best Summer Pasta Salad Recipe You Must Try This Season
LifeStyle1 day ago

The Best Summer Pasta Salad Recipe You Must Try This Season

I am currently sitting in my parents’ backyard, an oasis in the heart of Northern California, it is my happy...

Top 9 Dating Apps For 30s – Time To Find The Real Deal! Top 9 Dating Apps For 30s – Time To Find The Real Deal!
LifeStyle1 day ago

Top 9 Dating Apps For 30s – Time To Find The Real Deal!

Even if you’re the type of person who loves the thrill of the hunt, the seemingly endless dating carousel can...

Advertisement

Sport

Knott and Watanabe join other PH bets at the Tokyo Games Knott and Watanabe join other PH bets at the Tokyo Games
Sports1 min ago

Knott and Watanabe join other PH bets at the Tokyo Games

Kristina Marie Knott. RESEARCH FILE PHOTO MANILA, Philippines – Kristina Knott and judoka Kiyomi Watanabe received their spots for the...

Davante Adams hints again that he could leave the Packers after the season Davante Adams hints again that he could leave the Packers after the season
Sports9 mins ago

Davante Adams hints again that he could leave the Packers after the season

Four-time Green Bay Packers wide receiver Davante Adams is in the final year of his contract and assured everyone earlier...

Canadians emerge as price favorites in NHL playoff series Canadians emerge as price favorites in NHL playoff series
Sports23 mins ago

Canadians emerge as price favorites in NHL playoff series

The Montreal Canadiens can score their ticket to the Stanley Cup final for the first time in 28 years with...

Who is Ime Udoka?  Four things to know about the Celtics’ next head coach Who is Ime Udoka?  Four things to know about the Celtics’ next head coach
Sports31 mins ago

Who is Ime Udoka? Four things to know about the Celtics’ next head coach

The Celtics seem to have found their next head coach. ESPN’s Adrian Wojnarowski reported Wednesday that Boston is closing a...

Stroman ‘optimistic’ about his next outing after injury scare Stroman ‘optimistic’ about his next outing after injury scare
Sports32 mins ago

Stroman ‘optimistic’ about his next outing after injury scare

New York Mets starting right-hander Marcus Stroman gave the club its latest injury scare when he exited Tuesday’s home game...

What would an appearance in the Stanley Cup final mean for the city of Montreal? What would an appearance in the Stanley Cup final mean for the city of Montreal?
Sports46 mins ago

What would an appearance in the Stanley Cup final mean for the city of Montreal?

var adServerUrl = “”; var $ el = $ (“# video_container-789349”); var permalink = $ el.closest (‘. snet-single-article’). data (‘permalink’);...

Chris Paul plans to play Game 3 against Clippers Chris Paul plans to play Game 3 against Clippers
Sports53 mins ago

Chris Paul plans to play Game 3 against Clippers

Barring a setback before Thursday night, the Suns point guard Chris paul intends to return to action for Game 3...

Canucks needed to find positions for Sedins to have an impact and learn Canucks needed to find positions for Sedins to have an impact and learn
Sports1 hour ago

Canucks needed to find positions for Sedins to have an impact and learn

var adServerUrl = “”; var $ el = $ (“# video_container-942522”); var permalink = $ el.closest (‘. snet-single-article’). data (‘permalink’);...

Nationals GM slams ’embarrassing’ Phillies manager Joe Girardi: ‘He’s a con man’ Nationals GM slams ’embarrassing’ Phillies manager Joe Girardi: ‘He’s a con man’
Sports1 hour ago

Nationals GM slams ’embarrassing’ Phillies manager Joe Girardi: ‘He’s a con man’

Joe Girardi: Scammer? Girardi, manager of the 34-36 Phillies, asked umpires to review Max Scherzer for the third time during...

Monty Williams credits Brett Brown and Joe Prunty as game winner Monty Williams credits Brett Brown and Joe Prunty as game winner
Sports1 hour ago

Monty Williams credits Brett Brown and Joe Prunty as game winner

The Phoenix Suns made one of the greatest last-second in-bounds plays in NBA postseason history on Tuesday. Now Suns coach...

Advertisement

Entertainment

Drake Bell may face verdict on charges of danger to children Drake Bell may face verdict on charges of danger to children
Entertainment19 seconds ago

Drake Bell may face verdict on charges of danger to children

news Drake Bell may face verdict on charges of danger to children Drake Bell pleaded guilty to attempting to endanger...

Scarlett Johansson to produce and star in Tower of Terror film for Disney Scarlett Johansson to produce and star in Tower of Terror film for Disney
Entertainment2 mins ago

Scarlett Johansson to produce and star in Tower of Terror film for Disney

Not all Disney theme park attractions can be successfully adapted to the big screen. For each pirates of the Caribbean,...

TikToker confirms Disney Park hack to get free t-shirt TikToker confirms Disney Park hack to get free t-shirt
Entertainment3 mins ago

TikToker confirms Disney Park hack to get free t-shirt

Disney merchandising, as everyone knows, is expensive. But a TikToker appears to have been proven to be a gimmick that...

Andrew Yang’s presidential advisers blame his mayoral race advisers for his major failure Andrew Yang’s presidential advisers blame his mayoral race advisers for his major failure
Entertainment12 mins ago

Andrew Yang’s presidential advisers blame his mayoral race advisers for his major failure

For many months during the strangest mayoral campaign season in New York history, it seemed that Andrew Yang what is...

What’s more for June 23, 2021 What’s more for June 23, 2021
Entertainment22 mins ago

What’s more for June 23, 2021

As Stephon would say, this story has it all: baseball, burning phones, church, fraud, charity and lawsuit! I would really,...

Netflix’s new dating show brings out everyone’s inner animal Netflix’s new dating show brings out everyone’s inner animal
Entertainment25 mins ago

Netflix’s new dating show brings out everyone’s inner animal

It’s okay! Who of you put an ounce of dried mushrooms in my tea this morning? First of all, thank...

Gabrielle Union and Dwyane Wade reveal their new baby! Gabrielle Union and Dwyane Wade reveal their new baby!
Entertainment26 mins ago

Gabrielle Union and Dwyane Wade reveal their new baby!

Gabrielle Union and Dwyane Wade revealed their new ‘baby’ that they created together. Take a look at the post he...

David Schwimmer and Jennifer Aniston’s Cutest Quotes About Each Other David Schwimmer and Jennifer Aniston’s Cutest Quotes About Each Other
Entertainment35 mins ago

David Schwimmer and Jennifer Aniston’s Cutest Quotes About Each Other

I’ll be there for you! David schwimmer other Jennifer Aniston stole hearts as Ross Geller and Rachel Green, respectively, during...

Stars of “Teen Mom” ​​who underwent plastic surgery: photos then and now Stars of “Teen Mom” ​​who underwent plastic surgery: photos then and now
Entertainment45 mins ago

Stars of “Teen Mom” ​​who underwent plastic surgery: photos then and now

Complete transformation! Teenage mother stars old and new – like Jenelle Evans, Kailin Lowry, Amber Portwood and much more –...

Harrison Ford was injured rehearsing the ‘Indiana Jones 5’ fight scene Harrison Ford was injured rehearsing the ‘Indiana Jones 5’ fight scene
Entertainment48 mins ago

Harrison Ford was injured rehearsing the ‘Indiana Jones 5’ fight scene

Harrison Ford injured his shoulder while rehearsing a fight scene for Indiana Jones 5th. News Block reports that Harrison Ford,...

Advertisement

Tech

Microsoft prepares Windows 11 for a post-pandemic world Microsoft prepares Windows 11 for a post-pandemic world
Tech6 mins ago

Microsoft prepares Windows 11 for a post-pandemic world

Microsoft’s top software is about to be revised. Angela Lang / CNET The coronavirus has irrevocably changed the way we...

Antivirus creator John McAfee found dead in prison cell Antivirus creator John McAfee found dead in prison cell
Tech11 mins ago

Antivirus creator John McAfee found dead in prison cell

Former antivirus software creator John McAfee died in what was reported to be a suicide while awaiting extradition to face...

House judiciary passes bill to increase antitrust enforcement budget House judiciary passes bill to increase antitrust enforcement budget
Tech22 mins ago

House judiciary passes bill to increase antitrust enforcement budget

The Judiciary Committee of the US House of Representatives voted to pass a bill to increase the budgets of antitrust...

John McAfee, software pioneer turned fugitive, dies in Spanish prison John McAfee, software pioneer turned fugitive, dies in Spanish prison
Tech30 mins ago

John McAfee, software pioneer turned fugitive, dies in Spanish prison

John David McAfee, the founder of the antivirus software maker that bears his name, died in a prison in Spain...

Shin Megami Tensei V for Nintendo Switch: everything you need to know Shin Megami Tensei V for Nintendo Switch: everything you need to know
Tech34 mins ago

Shin Megami Tensei V for Nintendo Switch: everything you need to know

Source: ATLUS (screenshot) ATLUS first announced the release of Shin Megami Tensei V for Nintendo Switch in November 2017, but...

Apple works with New York Magazine on a ‘journalism project’ Apple works with New York Magazine on a ‘journalism project’
Tech44 mins ago

Apple works with New York Magazine on a ‘journalism project’

New York Magazine is working with Apple on some kind of journalistic project related to the Apple News platform, according...

Peacock and Amazon Reach Agreement to Add Streaming App to Fire TV Devices Peacock and Amazon Reach Agreement to Add Streaming App to Fire TV Devices
Tech51 mins ago

Peacock and Amazon Reach Agreement to Add Streaming App to Fire TV Devices

Angela Lang / CNET Peacock – the partially free and partially paid streaming service of Comcast‘s NBCUniversal – will finally...

You can now play some xCloud games on Xbox Series X-grade hardware You can now play some xCloud games on Xbox Series X-grade hardware
Tech55 mins ago

You can now play some xCloud games on Xbox Series X-grade hardware

Resume: When Microsoft announced the expansion of Xbox Game Pass to televisions, it also said that its data centers were...

Webcomic ‘Strange Planet’ Comes to Apple TV + as an Animated Series Webcomic ‘Strange Planet’ Comes to Apple TV + as an Animated Series
Tech1 hour ago

Webcomic ‘Strange Planet’ Comes to Apple TV + as an Animated Series

Apple TV + has ordered a direct series adaptation of “Strange Planet” with Dan Harmon and Nathan Pyle serving as...

Prime Day Laptop Deals Still Available – Big Savings on MacBook Air, Lenovo, Samsung Galaxy Book Pro and More Prime Day Laptop Deals Still Available – Big Savings on MacBook Air, Lenovo, Samsung Galaxy Book Pro and More
Tech1 hour ago

Prime Day Laptop Deals Still Available – Big Savings on MacBook Air, Lenovo, Samsung Galaxy Book Pro and More

Editor’s note, June 23: Prime Day has officially ended on Amazon, but Walmart sale continues throughout Wednesday. Review the the...

Advertisement
Advertisement