The Central American country of El Salvador will become the first country to declare Bitcoin legal tender, according to an announcement by President Nayib Bukele at the ongoing Bitcoin Conference in Miami.
In a video message played to the audience, Nayib Bukele said:
Central banks are increasingly taking actions that may cause harm to the economic stability of El Salvador… 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.
As part of the move, the country’s central bank will adopt Bitcoin as part of its reserves while citizens can also freely transact Bitcoin.
The announcement was prefaced by an emotional message shared by Jack Mallers CEO of Bitcoin Lightning payments startup Strike. Mallers whose company has been working with El-Salvador to onboard citizens to the Bitcoin network highlighted some of the frailties of their existing financial system.
Remittances into the country often take more than 50% of the amount in fees, a situation that Mallers said they have worked to fix in real-time by adopting the Bitcoin lightning network.
Over 70% of the active population of El Salvador doesn’t have a bank account. They’re not in the financial system. They [the government’asked me to help write a plan and that they viewed bitcoin as a world-class currency and that we needed to put together a Bitcoin plan to help these people.”
Mallers had helped the government put together a bill that would make such large-scale Bitcoin adoption possible, and promised to share the work in open-source fashion in a yet-to-be-released series dubbed “Bitcoin for Countries.”
A section of the bill from El-Salvador reads:
By adopting Bitcoin as a legal tender, El Salvador would have become the first country in the world to make such a bold move, and hopefully will not be the last as other countries warm up to Bitcoin.