El Salvador could become the first sovereign state in the world to accept bitcoin as legal tender. Salvadorian president attached a picture of himself with laser eyes to his tweet.
El Salvador's President Nayib Bukele plans to pass legislation that will make El Salvador the first sovereign nation in the world to approve bitcoin as legal tender. The President of El Salvador announced his plans during the Bitcoin 2021 videoconference in Miami.
Bukele announced a partnership between the El Salvadorian authorities and digital wallet operator Strike to build a modern financial infrastructure that includes blockchain services.
Next week, he plans to send a bill to Congress that will make bitcoin legal tender, Bukele said.
Jack Mallers, founder of the Lightning Network payments platform Strike, said this will go down as the “shot heard ’round the world for bitcoin.”
“What’s transformative here is that bitcoin is both the greatest reserve asset ever created and a superior monetary network. Holding bitcoin provides a way to protect developing economies from potential shocks of fiat currency inflation,” continued Mallers.
“It was an inevitability, but here already: the first country on track to make bitcoin legal tender,” said Adam Back, CEO of Blockstream.
El Salvador is mostly a cash economy, where roughly 70% of people do not have bank accounts or credit cards, CNBC notes. Remittances or money sent home by migrants account for over 20% of El Salvador's gross domestic product. Traditional payment networks and financial services charge about 10% or more for such international transfers.
The New Ideas Party of Bukele controls the country's Legislative Assembly, so the adoption of the bill is very likely.
“If 1% of it is invested in El Salvador, that would increase our GDP by 25%. On the other side, #Bitcoin will have 10 million potential new users and the fastest growing way to transfer 6 billion dollars a year in remittances,” Bukele tweeted. He also posted a photo of himself with laser eyes (a symbol of Bitcoin supporters expecting a price of $100,000).