The president of El Salvador in Central America is working hard to make bitcoin legal tender within his country’s borders. Nayib Bukele stated in a recorded message at a recent bitcoin conference in Miami, Florida that he would eventually like to see all citizens paying for goods and services with bitcoin.
El Salvador Residents Could Buy Necessities with Bitcoin Soon
In his message, Bukele said the following:
Next week, I will send to Congress a bill that will make bitcoin a legal tender in El Salvador. In the short term, this will generate jobs and help provide financial inclusion to thousands outside the formal economy and in the medium and long term, we hope that this small decision can help us push humanity at least a tiny bit into the right direction.
Bukele is also looking to solidify his country’s economy through crypto, as he further stated he would provide permanent residence to all crypto entrepreneurs looking to make their homes or the headquarters of their companies within his country.
Bitcoin as legal tender has been a long-fought battle in the world of digital finance. On the one hand, bitcoin was always designed to work as a payment currency – something that could potentially knock fiat currencies and credit cards out of the mix. However, this has been a difficult goal to achieve given how volatile BTC and its crypto cousins have been. As a result of the constant price swings, many businesses have often said “no” to BTC payments, and to an extent, we really cannot blame them.
Consider this little scenario. Say you walk into a store and buy $60 worth of items with bitcoin. The store does not transfer that BTC into fiat right away and later, the price of bitcoin goes down, and thus your $60 turns into $40. While you still get to walk away with everything you bought the store you purchased from has lost $20 in profit. It is not entirely fair to the enterprise in question.
Protecting a Country Against Inflation
El Salvador currently uses the U.S. dollar as its primary form of currency. The U.S. dollar has been subject to heavy inflation ever since the coronavirus pandemic began, and thus it appears bitcoin is being viewed as a serious alternative to standard fiat within the country. In addition, it is believed that bitcoin could also be a serious tool for remittance payments, as approximately 25 percent of El Salvador’s citizens call the U.S. home and sent approximately $6 billion back to their families last year.
Bukele has arguably been one of El Salvador’s most popular and influential leaders. The 39-year-old has proven to be a successful figure amongst his people, maintaining an approval rating of more than 90 percent and providing plenty of short-term financial benefits to the nation’s residents.