El Salvador becomes first country to recognize bitcoin as legal tender

It is a world first that could inspire others. El Salvador’s Congress on Wednesday approved a law converting bitcoin into legal tender. An initiative defended by President Nayib Bukele, which is politically in line with an authoritarian neoliberal line, in order to boost the growth of the Central American country.

The objective is to generate jobs and to “enable financial inclusion for thousands of people who are outside the legal economy”, he explained, specifying that “70% of the population does not have have a bank account and work in the informal economy ”. In this Central American country, where the US dollar serves as the official currency, and therefore where the decisions of the US central bank apply, Salvadorans’ remittances from abroad are an important support and represent 22% of gross domestic product (GDP).

The Salvadoran state is also preparing to create a trust of 150 billion dollars to provide liquidity to citizens and traders who would not be able to exchange their bitcoins and does not exclude placing it in the reserve. of the central bank. “The object of this law is the regularization of bitcoin as legal tender, unrestricted with discharge, unlimited in any transaction”, stipulates the first article of this law, which must be submitted for ratification to the Head of State.

Bitcoin is a decentralized asset with no direct connection to the real economy, which is based on blockchain technologies. This cryptocurrency remains very volatile but the growing interest of institutions and companies considered stable contributes to making it gradually enter into mores, beyond the initiated.

A bitcoin international

It was already possible, in El Salvador, to pay with the most famous cryptocurrency in hotels or shops on the Salvadoran coast. An ATM to change his bitcoins into dollars has even been installed, reports The International Courier.

Nayib Bukele’s initiative in favor of bitcoin has also found an echo in other Latin American countries, triggering the beginnings of what looks like a bitcoin international: three elected respectively in Paraguay, Argentina and Panama, as well as a politician in Brazil, have in the wake posted their support for cryptocurrencies on Twitter, information spotted by the site BTC Times. Some have used the unifying sign of the crypto-asset community for this, reports The echoes, by adding red “laser eyes” to their profile picture. It was originally intended to show his hope that bitcoin will reach $ 100,000.

In 2018, Venezuelan President Nicolàs Maduro, despite being politically and economically opposed to Nayib Bukele, had imposed on him the “anchoring” of his national currency, the bolivar, to petro, the very recent local cryptocurrency indexed to the prices of the oil, in order to circumvent the lack of liquidity and the financial sanctions imposed on it by the United States. For petro, on the other hand, unlike real cryptocurrencies according to experts, the currency is controlled by the government.

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