El Salvador has become the first country in the world to formally adopt cryptocurrency after its Congress voted overwhelmingly to approve a law classifying Bitcoin as legal tender, President Nayib Bukele said Wednesday, an initiative he hopes will boost foreign investment, improve financial inclusion and generate jobs.
Bukele, who announced plans to introduce a bill adopting Bitcoin as legal tender in El Salvador Saturday, said a supermajority of legislators in Congress had approved the law in a vote Wednesday.
The bill secured 62 out of 84 possible votes, Bukele said.
“History!” he added on Twitter.
Bitcoin is set to become legal tender in 90 days, meaning every business must accept the token for goods and services, alongside the U.S. Dollar.
Bukele has previously said this will make financial services accessible to the 70% of Salvadorans who do not have bank accounts and ease the transfer of remittances from abroad that make up around 20% of the country’s GDP.
El Salvador has used the U.S. Dollar as official currency since 2001, which Bitcoin will join, not replace. The vote marks a major milestone in monetary history and could be a gamechanger for business worldwide as Bitcoin becomes a more practical asset and the Central American state a cryptocurrency hub. The support of a nation state also could go a long way to dispel widespread skepticism of Bitcoin’s long term utility and acceptance, though fears will remain over the token’s volatility. El Salvador’s plans may interfere with ambitions the nation has with the International Monetary Fund, where it is seeking a $1 billion program.
What To Watch For
Other countries and banks may begin to adopt bitcoin, or other cryptocurrency tokens, in the future. Lawmakers in a number of Latin American countries have expressed at least a casual interest in following El Salvador’s footsteps, including Brazil and Panama.
Here’s Why El Salvador Wants To Be The First Country To Formally Adopt Bitcoin (Forbes)
El Salvador To Make Bitcoin Legal Tender: A Milestone In Monetary History (Forbes)