Updated 15 Jun, 2021

El Salvador Approves Bitcoin as its Official Currency

El Salvador

Key Takeaways:

  • El Salvador becomes the first country to adopt Bitcoin as official currency
  • In a Congress vote, the legislation on the digital asset passed with 62 out of 84 votes

El Salvador is officially the first country to classify Bitcoin as legal currency. The decision was made by Congress. They approved President Nayib Bukele’s proposal to adopt the world’s largest cryptocurrency as a way to improve the financial system in the poorest country in the region.

President Bukele applauds the significant milestone on Twitter

To celebrate the achievement, President Bukele took to Twitter. “The #BitcoinLaw has been approved by a supermajority in the Salvadoran Congress. 62 out of 84 votes! History!”

“It will bring financial inclusion, investment, tourism, innovation and economic development for our country,” President Bukele said after Congress gave Bitcoin the green light. Bitcoin should become legal tender in 90 days. Presently, the US dollar is the official currency used by Salvadorans.

Bitcoin aims to allow Salvadoran people access to finances

The small Central American country with a population of about 6.5 million has struggled for years to create and manage a stable financial system. The Bitcoin designation aims to open up financial transactions to those 70% of the people who do not have access to banks. In addition, the new legislation will make it easier for Salvadorans living abroad to send money to their native land.

According to the new law, the flagship cryptocurrency must be accepted by every business. Exceptions are only made unless it is unable to provide the needed technology to make transactions.

Oddly, the Congress vote happened the same day Donald Trump shared his opinion on Bitcoin. The former US President said he thinks Bitcoin is a “scam”. He added that “I don’t like it because it’s another currency competing against the dollar,” he told Fox Business. Mr. Trump added that he wanted to see the US dollar remain “the currency of the world”.

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