Representing Central America, El Salvador reportedly approved cryptocurrency as a legal tender within its sovereign state as the first. The Salvadoran president, Nayib Bukele proposed the enactment of his bill into law — his interest specifically focused on developing his economy via Bitcoin.
Surprisingly, El Salvador accredited Bitcoin as a legal tender not mindful of its challenging effect on its fiscal initiative the Salvadoran is yet to assign with the International Monetary Fund, IMF. Still, the Salvadoran lawmakers prefer to favor Bukele’s bill into law.
President Bukele then shared a tweet about the success of his Assembly’s approval of digital money as a legal tender in El Salvador — “The #BitcoinLaw has just been approved by a qualified majority.”
El Salvador’s Legislative Assembly confirmed Bukele’s announcement via Twitter: “With 62 votes, the legislative plenary session approves the #LeyBitcoin [that allows] El Salvador to adopt #Bitcoin as a legal currency. #Thenewassembly continues to make history” as the first Central American country to add cryptocurrency to its options of legal money.
It worth noting that Salvadorans in the diaspora will benefit the most with Bitcoin as a legal tender whereby remitting simplified cash to family and friends in El Salvador — just a few clicks for confirmation. Cryptocurrency is also expected to improve El Salvador’s digital economy, developing tourism and innovation, as well as introducing “financial inclusion,” while appreciating their investments.
According to president Bukele’s word of confidence, “Bitcoin is the safest currency for exchange, and billing with zero risks involved.” While the dollar remains in the Salvadoran’s options for legal tender. Bukele also noted that Bitcoin will be official digital money in his country.
El Salvador’s government also plans to make convertible infrastructures available — “the government will guarantee the convertibility to the exact value in dollars at the moment of each transaction.”
The Central American set to take their economy to the next level with cryptocurrency. The Salvadoran economy depends on the number of dollars their citizens in diaspora remit back to El Salvador. A dollarized economy that has remitted roughly a fifth of its annual revenue — $6bn dollars has been sent back to El Salvador, in line with World Bank’s data.
Remember, El Salvador also seeks about $1bn funding from the IMF, whereby the monetary agency’s head of mission for El Salvador, Alina Carare reacted towards reports about the Salvadoran involvement with digital money — “we will have more information as we continue our consultations with the authorities.”
Meanwhile, financial experts — Carlos de Sousa, a portfolio manager at Vontobel Asset Management, contradicts Bukele’s involvement with the decentralized legal tender that cannot be traced to bill citizens for tax. Carlos said: “Cryptocurrencies are overall a very easy way to avoid taxation and the authorities because it’s a completely decentralized system, you can do money laundering, you can do tax avoidance and other defaults.”
On the other hand, Cryptocurrency has been responsive with sorting bills via the web. Digital money only exists on the internet — neither a government nor its Agency such as Central Banks has authority over Cryptocurrencies. Bitcoin — the most recognized digital money has nevertheless gained more market value overtime.
In contrast with real-time money, Bitcoin’s market value is currently priced at $36,127 for one BTC. Nonetheless, Cryptocurrencies have therefore been considered to replace real-time money to transact financial exchange or bills.