El Salvador becomes first country to make Bitcoin a legal currency

The government of El Salvador has passed a bill that will see Bitcoin join the US dollar as legal tender in the country.

According to the BBC, this move will mean that the cryptocurrency will now be accepted everywhere for goods and services within 90 days. This also means it has become the first country worldwide to have Bitcoin as a legal tender.

El Salvadorian president Nayib Bukele said the move would ‘make it easier for Salvadorans living abroad to send money home’. The country’s economy relies massively on remittances, with money sent home from abroad making up around 20% of the El Salvador’s GDP.

Currently, Salvadorans who live outside El Salvador send back over $4bn to the country each year.

The president also stated in a tweet before the vote on the currencies introduction that the Bitcoin tender would ‘bring financial inclusion, investment, tourism, innovation and economic development for our country’.

Bukele stated that the move would also open up financial services to the almost 70% of Salvadorans who are currently without bank accounts.

The growth of cryptocurrency usage has received positive and negative reactions in recent months. Recently, the UK Chancellor of the Exchequer Rishi Sunak told the Bank of England to look at the case for a potential ‘Britcoin’ or central-bank-backed digital currency.

In contrast, three Chinese associations – the National Internet Finance Association of China, the China Banking Association and the China Payment and Clearing Association – previously called for a complete ban on financial institutions and payment firms providing cryptocurrency services to customers.

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