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Bitcoin banners are seen outside a bistro on El Zonte Beach in Chiltiupan, El Salvador, June 8, 2021. REUTERS/Jose Cabezas/File Photo
El Salvador has become the first country in the world to officially adopt bitcoin as a legal currency after Congress approved President Neb Bukele’s proposal to adopt the cryptocurrency.
With 62 out of 84 possible votes, the majority of lawmakers voted in favor of the initiative to create a law that officially adopts bitcoin, despite concerns about the potential impact on El Salvador’s program with the International Monetary Fund.
Bukele has touted the use of bitcoin for its potential to help Salvadorans living abroad send remittances home, while saying the US dollar will also continue to be legal tender.
“This will bring financial inclusion, investment, tourism, innovation and economic development to our country,” Bukele said in a tweet shortly before the vote in the Congress controlled by his party and allies.
He added that the use of bitcoin, the use of which would be voluntary, would not bring risks to users. Its use as legal tender will become legal within 90 days.
“The government will ensure convertibility to the dollar value at the moment of each transaction,” Bukele said.
El Salvador’s dollarized economy relies heavily on money sent from workers abroad. World Bank data showed that remittances to the country accounted for nearly $6 billion, or about a fifth of GDP, in 2019, one of the highest in the world.
Experts said the move to bitcoin could complicate talks with the International Monetary Fund, as El Salvador seeks a more than $1 billion program.
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