On Wednesday, El Salvador became the world’s first sovereign country to grant a cryptocurrency, Bitcoin, the status of a legal tender, a measure championed by President Nayib Bukele.
The 84-seat Salvadoran Legislative Assembly passed what has been referred to as “the Bitcoin Law”, with 62 votes in favor.
The Bitcoin Law was opposed by opposition politicians who criticized the speed with which the vote took place.
Bukele’s ruling party was able to push the law through at an accelerated pace since it boasts a supermajority in the current assembly, which was inaugurated on May 1, 2021.
The breaking news for the crypto world was first announced on Twitter by Bukele’s communications secretary.
In a subsequent tweet, El Salvador’s President himself celebrated the development described as “History!” The decision might attract foreign investors
Bukele has previously made it clear he is hoping to attract foreign investors to the Central American nation thanks to the new status of Bitcoin as a legal tender.
Another goal for the low-income Northern Triangle country, which is heavily reliant on immigrant remittances, is to use the blockchain currency in order to cut the price of remittance transfers.
Stripe, a mobile payments app, which recently made a debut in El Salvador, is going to handle the rollout.
Prior to Wednesday’s vote, the Salvadoran President pointed out that most citizens of the country, about 70%, lack “traditional bank accounts”.
In his words, the new law would empower them since they would be able to set up digital wallets with their smartphones.
On the first day of the Miami Bitcoin conference last Saturday, Bukele sent a recorded message to the event announcing the upcoming parliamentary vote to legalize cryptocurrency as a legal payment means in his country.
On Sunday, the 39-year-old leader whose approval rating has been over 90%, took to Twitter to announce that El Salvador’s government will provide crypto entrepreneurs with permanent residences immediately upon request.
Strong ties with US
El Salvador’s official currency is the US dollar.
About 25% of the 6.5-million-strong Salvadoran population resides in the US.
In the pandemic year of 2020, the remittances they sent home surpassed $6 billion!
Bukele has argued that the short-term effects of legalizing Bitcoin as a legal tender would create jobs, and include numerous people who are presently outside the formal economy.
He hopes, however, that in the medium and long run, his country’s decision would help humanity take a step in the right direction.
Bukele has had cordial relations with the administration of President Donald Trump but has been at odds with the Biden administration, especially as he has concentrated power and has carried out a crackdown against El Salvador’s supreme court and attorney general.