El Salvador approves Bitcoin as legal tender | Crypto News

Most of the 84 lawmakers 62 approved the bill, which was introduced by President Booker last week.

El Salvador has approved A proposal A law from President Nayib Bukele classifies Bitcoin as legal tender, making this Central American country the first country in the world to do so.

Despite concerns that El Salvador’s plans with the International Monetary Fund may be affected, most lawmakers voted for the initiative late on Tuesday to enact a law that will officially accept cryptocurrencies.

“#BitcoinLaw has just been approved in the legislative assembly with a qualified majority”, President Naib Bucker tweeted after voting in the parliament.

Translation: The legislative plenary session passed with 62 votes #LeyBitcoin [that allows] El Salvador uses #Bitcoin as its legal tender. #Thenewassembly Continue to make history! A tweet from the Legislative Assembly said.

Bukele touts the use of Bitcoin because it has the potential to help Salvadorans living abroad remit money back home, while also stating that the U.S. dollar will continue to be legal tender.

“It will bring financial inclusion, investment, tourism, innovation and economic development to our country,” Booker said in a tweet shortly before the vote.

He added that the use of Bitcoin is optional and will not pose risks to users. Its use as legal tender will become law within 90 days.

“The government will guarantee that every transaction can be converted to the exact dollar value,” Bukele said.

El Salvador’s dollarized economy relies heavily on money sent back by citizens working abroad.

According to data from the World Bank, remittances to the country in 2019 amounted to nearly 6 billion U.S. dollars, accounting for about one-fifth of GDP and one of the countries with the highest rates in the world.

Experts say that the switch to Bitcoin may complicate negotiations with the International Monetary Fund, and El Salvador is seeking plans for more than $1 billion.

Alina Carare, the head of the IMF delegation to El Salvador, said on Monday evening that the IMF is “watching the news and will obtain more information as we continue to negotiate with the authorities”.

Carlos de Sousa, a portfolio manager at Vontobel Asset Management, said that Bitcoin’s push seems to be ill-considered, because Bukele may make tax increases more difficult and shoot himself.

“In general, cryptocurrency is a very simple way of avoiding tax, and it is also a very simple way of avoiding tax, because it is a completely decentralized system, you can launder money, avoid taxes, etc.,” he said.

The President of El Salvador, Nayib Bukele, touted the use of Bitcoin because of its potential to help Salvadorans living abroad send money back to their country [File:Reuters]

Cryptocurrency is A currency in digital form Can be used to pay for certain online transactions.

Like “real” currencies, you can own 1, 10, or millions of bitcoins. Unlike real money, cryptocurrency only exists online and is not supported by any government or central bank.

encryption Believers say Currency represents the future economy. But in the final analysis, their value depends on their limited supply and the number of people chasing them.

According to data on the CoinMarketCap page, the cryptocurrency market grew to more than $2.5 trillion in mid-May last year, driven by the interest of increasingly serious investors from Wall Street to Silicon Valley.

But this volatile currency—currently priced at $36,127—and its vague legal status have raised questions about whether it can replace legal tender in daily transactions.

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