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El Salvador President Announces Intention to Make Bitcoin Legal Tender
The digital currency would be used alongside the U.S. Dollar, El Salvador's official currency.
International
Just a mere month after China cracked down on the cryptocurrency, El Salvador's president announced he will make Bitcoin legal tender in his country, according to the BBC.
This could make the Central American country the first in the world to formally adopt the cryptocurrency and would see it used alongside El Salvador's official currency U.S. Dollar.
President Nayib Bukele said Bitcoin could offer many advantages:
"In the short term, this will generate jobs and help provide financial inclusion to thousands outside the formal economy," Bukele told a Bitcoin conference in Florida.
In a tweet on his official account, Bukele added that the cryptocurrency could provide " the fastest growing way to transfer 6 billion dollars a year in remittances."
Remittances make up around 20% of El Salvador's gross domestic product (GDP). More than two million Salvadorans live outside the country and send back more than $4 billion each year.
Financial inclusion
He further explained that "70% of El Salvador’s population doesn’t have a bank account and work in the informal economy." The reasoning is that Bitcoin would provide financial inclusion which is "not only a moral imperative, but also a way to grow the country’s economy, providing access to credit, savings, investment, and secure transactions."
If put into practice, Bukele's decision could see the cryptocurrency rise in value. Back in October of 2019, Bitcoin surged by 40% when Chinese President Xi Jinping said the country should “seize the opportunity” afforded by blockchain technology.
Bitcoin is known for having many fluctuations in value, depending much on news related to the cryptocurrency. However, the digital currency has been deemed overall a safe investment during the pandemic.