El Salvador has given bitcoin a legal tender status. This makes the Central American country the first country to adopt the cryptocurrency as legal tender.
It was El Salvador’s 46th and incumbent president Nayib Bukele, 39, who proposed the use of bitcoin as legal tender in the country alongside the United States dollar, which is currently is official currency. On June 9, 2021, he sent the Bitcoin Law to Congress for a vote.
The purpose of the Bitcoin Law is to regulate bitcoin as unrestricted legal tender with liberating power, unlimited in any transaction and to any title that public or private natural or legal persons require carrying out. Out of the 84 legislature votes, 62 voted in favor of the law.
Bukele took to Twitter to share the news. Shortly after the vote, the price of bitcoin became $34,239.17, marking 5 percent increase.
Cryptocurrencies are held in digital wallets and do not require a bank account. This could increase the access of people in poorer communities in El Salvador to their finances, according to CNN Business.
With a population of 6.4 million, El Salvador is a densely populated country. The country expects an economic growth of 4.9 percent in 2021, according to the World Bank.
In 2020, El Salvador successfully contained the new coronavirus (COVID-19) pandemic but its economy still suffered. Using bitcoin as legal tender would promote the country’s tourism, innovation, economic development and financial inclusion, according to Bukele.
Bukele was born in San Salvador, El Salvador to Muslim Palestinian-Salvadorian father Armando Bukele Kattán and Christian Salvadorian mother Olga Ortez de Bukele. Armando passed away on November 30, 2015.
Nayib was the mayor of Nuevo Cuscatlán, La Libertad, El Salvador from May 1, 2012 to April 30, 2015 and the mayor of San Salvador from May 1, 2015 to April 30, 2018. He assumed office as the president of El Salvador on June 1, 2019.