Cryptocurrencies have left the era of being just a digital currency to the era of being seen as a religion (A tweet made by one Dr. Joe Abah), and interestingly today, seen as a legal tender in a country in Central America.
Cryptocurrencies in recent times and against all odds have proven to be a digital currency that will remain relevant and sustainable now and in the future. Its relevance cannot be overemphasized as a country has decided to adopt cryptocurrencies as a legal tender.
In this article, we shall be exposing you to a country that has waved away every odds and decided to adopt cryptocurrencies as legal tender and the reasons behind such decisions.
A legal tender is anything that has been accepted as a legal exchange for goods and services rendered.
El Salvador is the country that has decided to adopt cryptocurrencies as legal tender.
Nayib Armando Bukele Ortez is the young and 46th president of El Salvador, passed a proposal weeks ago that suggested that Bitcoin should be regarded as a legal tender In El Salvador.
His proposal became a groundbreaking idea and now law.
The country is the first in the world to use Bitcoin as a legal tender. The usage of Bitcoin does not replace U.s dollars as a medium of exchange in North America. This suggestion gained dominance when it received a vote of 62 out of 84 in a Congress organized in El Salvador.
Today in El Salvador, Bitcoin plays the same role as U.s dollars.
In his assertions, he went further to express his reasons for wanting to adopt Bitcoin as a legal tender. Such reasons are highlighted below:
The young 39-year president in his proposal said that adopting Bitcoin as a medium of exchange will help promote financial inclusion.
By Financial inclusion, he meant the availability and equality of opportunities to access financial services. It refers to
a process by which individuals and businesses can access appropriate, affordable, and timely financial products and services. Wikipedia.
Financial inclusion is a way of making sure that everyone in society has equal access to products and services irrespective of whether they are banked or unbanked.
Currently, about 70% of El Salvador's population is unbanked. This simply means that the larger population lacks access to basic bank accounts and the majority resort to private and personal banking systems which crypto is one such means.
With cryptocurrencies according to the El Salvador new law which the major purpose of the law is to regulate bitcoin as unrestricted legal tender with liberating power, unlimited in any form, anyone in possession of Bitcoin and Cryptocurrencies can have full financial access to products and services. This means that you can buy and sell as long as you are possessing Bitcoin.
This is what the president's idea entails: that individuals can now have full access to finance, products and services without discriminations or limitations of being banked or unbanked.
This is one of the major reasons why El Salvador has decided to adopt Bitcoin as a legal tender.
Years back, the difference in currency limits trades and investments. This same difference in different world's currencies affects currency value and as such does not promote trade and investment within and outside one's country.
With this idea in view, the President of El Salvador realized that the majority of the world's population own Bitcoin and other cryptocurrencies. So being a country that has removed restrictions on Bitcoin usage, traders from different parts of the world who have access to Bitcoin can buy, sell and even invest in El Salvador without losing value for their currency, thereby promoting industrialization in such areas.
Tourism is an essential revenue generator in every country if properly developed and managed. Tourists and developers see tourism as an invisible exchange. This is because, during tourism trips, foreign exchanges are made. But one factor that discourages tourists from making international trips is the difference in currency. When this barrier is broken, tourists can now travel freely knowing fully well that there is a favourable means for them to carry out transactions while on this journey.
When tourists consider the money that will be involved in making an international trip, they are oftentimes discouraged and tend to terminate such appointments.
Today, the possibility of people who possess Bitcoin to make an international trip to El Salvador is bound to go higher as they can carry out financial transactions while in El Salvador with their bitcoins.
This is a massive way of promoting the economy and revenue generation of a country.
Innovations and Economic development is a crucial factor that every country and government desires. One of the ways to achieve that is by providing generally acceptable means of commerce and investment. Adopting Cryptocurrencies as a legal tender is one such ways.
The highlights of this article are extracted from nbcnews