El Salvador 1st to make bitcoin legal tender
El Salvador has become the first country to adopt bitcoin as legal tender after lawmakers approved President Nayib Bukele’s proposal to embrace the cryptocurrency. Lawmakers voted in favour of creating a law to adopt bitcoin, despite concern about the potential impact on El Salvador’s programme with the IMF.
Bukele has touted the use of bitcoin for its potential to help Salvadorans living abroad to send remittances back home, while saying the US dollar will also continue as legal tender.
The use of bitcoin will be optional for individuals and would not bring risks to users, Bukele said, with the government guaranteeing convertibility to dollars at the time of transaction through a trust created at the country’s development bank Bandesal.
Under the law, bitcoin must be accepted by firms when offered as payment for goods and services. Tax contributions can also be paid in the cryptocurrency. Its use as legal tender will begin in 90 days, with the bitcoin-dollar exchange rate set by the market. REUTERS