El Salvador Approves the Bill to Make Bitcoin a Legal Tender in the Country

El Salvador created history as its lawmakers voted to accept Bitcoin as legal tender on June 9, 2021. It is the first nation in the world to do so. The crypto world has been eagerly waiting for this day when a sovereign country will finally accept cryptocurrencies as legal tender.

In a Twitter post, the President of El Salvador, Nayib Bukele, said that the country’s legislators had voted in favor of the bill to officially recognize Bitcoin as a legal tender by a majority with 62 out of 84 votes. Additionally, the legislative assembly of El Salvador also confirmed the same in a tweet, saying, “In the legislative plenary session, the assembly approved Bitcoin law with which El Salvador adopts Bitcoin as a legal currency.”

The passing of the law allows Bitcoin – the biggest cryptocurrency by market value, to be used for paying taxes. Moreover, business entities would also be required to accept Bitcoin for payment; however, according to the bill, firms that cannot process such types of payments will be exempted.

On June 6, President Bukele had explained the advantage of having Bitcoin as a legal tender in a series of tweets. He even said that it can help El Salvador citizens living abroad who regularly send money back home for easy money transfers. In addition, he quoted that 70% of the country’s population works in the informal economy as they don’t have a bank account.

Overall, President Bukele believes the adoption of Bitcoin as a legal tender will have a positive impact on the current and future lives of its citizens.

What is the currency of El Salvador?

Over the years, El Salvador has made use of multiple types of currencies, and its currency history reveals the turbulent past of the country itself. Since El Salvador does not have its own fiat currency, it has used the US dollar as a legal tender. 

Moreover, the country’s economy relies mainly on money sent back home by its citizens living abroad, and the service charges for such transfers can be huge and may even take days to get transferred to the person. Hence, Bukele believes that this move will help strengthen the economy of the country and help provide financial inclusion to citizens outside the formal economy. 

This historical move is expected to boost the image of cryptocurrencies, especially Bitcoin’s image, which is mostly believed as the currency of the future.

Which Other Countries are Considering to Make Bitcoin a Legal Tender?

El Salvador has officially become the first country to make Bitcoin a legal tender. Now, the question is, which country will be next to approve Bitcoin as a legal tender? Multiple Latin American politicians have shown interest in legalizing Bitcoin as a currency in their respective countries. Some of their reasoning being: inflation, over-reliance on the US dollar, and becoming a hub of the tech sector by attracting thousands of tech startups.

The second country that has shown interest in legalizing Bitcoin as a currency is Paraguay. It was suggested by Carlitos Rejala, a Congressman in Paraguay that he wants to make Bitcoin a legal tender in the country to accommodate the new generation. The next country on the list is Panama, where Congressman Gabriel Silva tweeted that he plans to submit a bill similar to one that the President of El Salvador submitted. He believes that Panama should not be left behind from this financial revolution.

Brazil, the South American Economic Giant, too, has shown an interest in making Bitcoin a legal tender in the country. The State Deputy for the Rio Grande do Sul of Brazil, Fabio Ostermann, posted a photo with laser eyes, a common trend among crypto enthusiasts, specifically Bitcoin supporters. He also changed his profile picture with the one where a laser is coming out of his eyes. It also had hashtags #ToTheMoon & #Bitcoin. 

Following the trend, Mexican Senator Indira Kempis Martínez shared some Bitcoin-related posts on Twitter. She also a profile picture with laser eyes. Argentina's National Deputy for Nequén, Francisco Sànchez, posted a photo with laser eyes and mentioned: “I can't believe it, but this is how it is.”

Overall, it seems that Latin American countries are leading when it comes to showing interest in making Bitcoin a legal tender.