Here’s why El Salvador wants to be the first country to formally adopt Bitcoin

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El Salvador’s President Nayib Bukele said on Saturday that he will introduce a bill to Congress this week for the country to formally adopt bitcoin as legal tender, in the hope that it will be the first country to officially use cryptocurrency. attract investment and allow more residents to participate in the formal economy.

Key facts

Bitcoin could be an innovative idea that could launch El Salvador into a more optimistic future, Bukele said on Saturday during a virtual speech to a bitcoin convention in Miami, Florida.

The adoption of bitcoin in the short term would create jobs and provide financial inclusion to thousands of people outside the formal economy, Bukele said, like 70% of Salvadorans who do not have a bank account, but did not elaborate on how the new one would work. politics.

It could also attract investment, Bukele said, with a market capitalization of $ 680 billion, if only 1% of bitcoin is invested in El Salvador, the country’s GDP. increase by 25%.

Bukele argued that Bitcoin would be particularly useful in El Salvador, since about a quarter of the country’s GDP comes from the money sent home by the millions of Salvadoran citizens who work abroad and send more than $ 6 billion per year.

Adopting bitcoin as legal tender would help more than a million low-income families in El Salvador they avoid paying fees to intermediaries when they receive money from relatives abroad, Bukele said.

Crucial appointment

“We hope this decision is just the beginning to provide a space in which some of the leading innovators can reimagine the future of finance, which could help billions around the world,” Bukele said Saturday.

Large number

$ 27 billion. That was the country GDP 2019, which makes it one of the poorest countries in its region.

Key Background

Bukele has partnered with Strike digital wallet and is working with CEO Jack Mallers to help the country legally adopt bitcoin. El Salvador has used the US dollar as its official currency since 2001. Bukele’s New Ideas party and its allies won a supermajority during the midterm elections in March. Critics have raised concerns about the notoriously volatile nature of bitcoin prices and the enormous amount of energy bitcoin consumes. El Salvador is the smallest country in South America and almost 40% of the population lives below the poverty line.

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