Infotech El Salvador becomes the first country to recognize bitcoin as legal tender

El Salvador becomes the first country to recognize bitcoin as legal tender

A world first. The Congress of El Salvador approved this Wednesday, June 9 a law converting bitcoin into legal tender, an initiative defended by President Nayib Bukele in order to boost the growth of this Central American country.

“The object of this law is the regularization of bitcoin as legal tender, unrestricted with discharge, unlimited in any transaction”, stipulates the first article of this law, which must be submitted for ratification to the Head of State.

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Last Saturday, Nayib Bukele announced his intention to legalize bitcoin, with the aim of generating jobs and “Enable financial inclusion for thousands of people who are outside the legal economy”.

He had explained that “70% of the population did not have a bank account and worked in the informal economy”.

Growing interest from institutions and companies in bitcoin

In El Salvador’s dollarized economy, Salvadorans’ remittances from abroad are a significant support and equivalent to 22% of gross domestic product (GDP).

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Bitcoin is a decentralized asset with no direct connection to the real economy, which is based on blockchain technologies.

This cryptocurrency remains very volatile but the growing interest of institutions and companies considered stable contributes to making it gradually enter into mores, beyond the initiated.

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