El Salvador could soon become the first country in the world to have a cryptocurrency as legal tender. The President of El Salvador, Nayib Bukele has announced his support for the legislation that could legalize Bitcoin. It could work wonders for the country’s GDP and bring in more financial inclusion across the population, most of whom do not hold bank accounts.
President Supports Legislation To Make Bitcoin Legal Tender
Earlier today, President Bukele announced his support for legislation that is set to make Bitcoin legal tender during the Miami Bitcoin conference. He also took to Twitter to further elaborate on his decision.
“#Bitcoin has a market cap of $680 billion dollars. If 1% of it is invested in El Salvador, that would increase our GDP by 25%.”
This means that the citizens of El Salvador will be able to use Bitcoin as valid payment in exchange for goods and services. This landmark decision could put El Salvador on the global crypto map by shifting a largely cash-based economy to an inclusive and transparent digital economy, where the people’s bank account would be on their phones. This would be a turning point for the country’s economy, considering the fact that over 70% of the population do not have bank accounts.
Further, President Bukele also stated that by using BTC as legal tender the amount received by more than a million low-income families will increase in the equivalent of billions of dollars every year, thus improving lives across the country.
Another Feather In The Cap For Bitcoin
President Bukele also explained that with the entire population of El Salvador using BTC for their transactions, Bitcoin would have a potential of 10 million new users.
According to Blockstream CEO Adam Back,
“It was an inevitability, but here already: the first country on track to make bitcoin legal tender. Another milestone for Bitcoin and El Salvador. We're pleased to help El Salvador on its journey towards adoption of the Bitcoin Standard,”
This could be the next big milestone for BTC, as banking systems around the world would likely treat it as any other foreign currency.
Favourable Treatment For BTC In The US Could Be In The Horizon
If the legislation is passed by El Salvador Congress, then BTC would legally become money under US law.
According to Founder & CEO of Avanti Financial Group, Caitlin Long,
“*IF* #ElSalvador does pass legislation to recognize #bitcoin as legal tender, #BTC would v likely become *MONEY* under US commercial law.”
She also stated that this could be a work-around the fact that it is not possible to make BTC a legal tender anywhere in the United States without amending the constitution. According to Long, if BTC becomes legal tender in El Salvador, then the US would be able to consider the crypto as ‘money’ under commercial law and as ‘cash’ under accounting rules.
American venture capital investor, and founder of Draper Fisher Jurvetson, tweeted that “Entrepreneurs and investors will be on the next flights to El Salvador. Brilliant government move.”
Investor and Entrepreneur Anthony Pompliano believes that this is just the start for countries to start legalizing Bitcoin. He tweeted,
“This is the first country to take such a courageous step, but it won’t be the last…Bitcoin is inevitable.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.