The President of El Salvador stated that he will make the cryptocurrency Bitcoin the legal tender of the state.
If the plan is supported by Congress, this Central American country will become the first country in the world to officially accept digital currencies.
Bitcoin will be used with the official currency of El Salvador, the U.S. dollar.
President Nayib Bukele stated that Bitcoin will make it easier for many Salvadorans to live abroad and send money from abroad to their home country.
“In the short term, it will create jobs outside the formal economy and help thousands of foreign countries economically,” Bukele said at the Bitcoin conference in Florida, adding that the legalization of cryptocurrencies will increase investors Interest in the state.
Bukele said that a bill to legalize cryptocurrencies will be submitted to Congress next week. The President said that if passed, the move will provide more financial opportunities for 70% of Salvadorans who do not have a bank account.
The economy of El Salvador relies on funds sent back to the country from abroad, which accounts for about 20% of its GDP.
More than 2 million Salvadorans live abroad, but at the same time keep in touch with the place where they were born, sending about $4 billion annually.
The current situation is that these transactions are charged and need to wait a few days to complete. Bukele said that sometimes the money must be received in person.
“The introduction of Bitcoin will improve the quality of life and the future of millions of people,” he pointed out.
The President of El Salvador does not want to explain in more detail how everything will eventually work.
Bitcoin, as a cryptocurrency, still has no direct connection with the real economy. Its great shocks have existed from the past few years to the present.
Most central banks in the world are exploring the possibility of creating their own digital currency. In April of this year, the Bank of England announced that it is seeking to create a digital currency that coexists with currency and bank deposits.