El Salvador’s president, Nayib Bukele, plans to make Bitcoin legal tender.
The proposed bill, announced at Miami’s Bitcoin 2021 conference, drew speculation that Salvadorans will soon buy their groceries with Bitcoin.
Bukele tweeted today that the bill would also make it cheaper and quicker for migrants to send money back home to El Salvador.
#Bitcoin has a market cap of $680 billion dollars.— Nayib Bukele 🇸🇻 (@nayibbukele) June 6, 2021
If 1% of it is invested in El Salvador, that would increase our GDP by 25%.
On the other side, #Bitcoin will have 10 million potential new users and the fastest growing way to transfer 6 billion dollars a year in remittances.
Only 30% of Salvadorans have bank accounts, he said, making remittances in fiat currencies unnecessarily expensive. A big deal, considering remittances comprise 21% of the country’s GDP.
The change may also allow banks to transact in Bitcoin, accept deposits and hand out loans in the cryptocurrency.
Since the country already scrapped its national currency in favor of the dollar, there’s little to lose by allowing people to choose freely between two legally equivalent alternative currency options.