El Salvador has passed a resolution to make Bitcoin a legal currency, making it the first country to do so (through the guard). By law, citizens can use Bitcoin to do everything from paying taxes and paying off debts to buying goods and services. The move was championed by President Nayib Bukele, who says it is a way to help those who can’t access banks, and those who want to send money back to the country from abroad, but critics fear it will be more showy. than substantive change.
The proposal was passed by El Salvador’s Congress on Tuesday evening, after Bukele announced it at a Bitcoin conference in Miami last week. It wasn’t a close call, with 62 out of 84 lawmakers voting for it, but it’s worth noting that Bukele holds significant amounts of political power in the country — his party makes up a majority of Congress, giving him take control of a large part of the government earlier this year.
While Bitcoin will become an official currency for El Salvador in just under three months, it won’t be its only currency — the US dollar, which was previously the country’s sole currency, will remain as an option. according to crypto news Bukele said he wanted the country’s citizens to think of money in terms of Bitcoin, not dollars. The resolution states that citizens should be able to exchange between the two currencies at any time and that US dollars “will be used as the reference currency” for accounting.
according to The Guardian, some human rights groups targeting Central America have doubts about Bitcoin’s adoption, leading to a meaningful change for many of the country’s citizens. One concern is that the lower class of the country will not have access to the technology needed to use and store Bitcoin. While the law requires anyone offering goods or services to accept Bitcoin, it does have an exception for those who don’t have access to the technology. The law does say that the government will “promote necessary training and mechanisms” to enable the population to use Bitcoin.
The country is not currently a major Bitcoin mining hub – according to according University of Cambridge estimates, it is not in the top 10 mining countries. In fact, according to the university’s map, El Salvador’s contributions make up 0.00 percent of the global computing power used for Bitcoin. However, Bukele could change that – he tweeted that the state electric company has been commissioned to provide cheap electricity for mining powered by volcanoes (no, that’s no joke).
I just called the president of… @LaGeoSV (our state-owned geothermal energy company), to prepare a plan to provide facilities for: #Bitcoin mining with very cheap, 100% clean, 100% renewable, zero emissions energy from our volcanoes
This is going to evolve fast! pic.twitter.com/1316DV4YwT
— Nayib Bukele (@nayibbukele) June 9, 2021