The Congress of El Salvador has passed a bill that makes bitcoin legal tender ,as the president of this Central American country announced.
El Salvador becomes the first us of a to undertake a cryptocurrency. The Bitcoin bill has just been approved by the a majority of the parliament in the legislature. President Negib Boukele twitted "History", whie everyone is wondering what is actually going on, and the Bitcoin holders are celebrating.
The president stated the bill, which he had tabled ultimate week, was authorized by sixtytwo of the eightyfour lawmakers. It was voted in favor of Boukele's allies no matter minor opposition parties criticizing the vote and refusing to support it.
According to Boukele:"The adoption of the cryptocurrency would deliver financial inclusion, investment, tourism, innovation and economic growth" to the country.
The leader of El Salvador described bitcoin as the fastest developing way to transfer billions of dollars in remittances and a way to avoid tens of millions being lost to intermediaries.
Remittances from Salvadorians working abroad account for a large section of the economic system are accounting for more than 20% of the GDP. In 2020, remittances to the United States amounted to $ 5.9 billion, in accordance to official figures.
A member of parliament from the Grand Alliance for National Unity, Romeo Auerbach,an ally of Boukele, said: "This is a regulation that will put El Salvador at the center of the world, we will end up more attractive for foreign investment".
By mid-May 2020, the cryptocurrency market had grown to greater than $ 2.5 trillion market cap, driven by serious buyers from Wall Street to Silicon Valley.
But the volatility of bitcoin which currently stands at $37500 and its vague legal status raise questions about whether it will ever be able to replace the regular fiat currency in every day trading.
Fees of Bitcoin are also extremely high, and questions also arise by the use of third parties that are considered "custodial", which offer no control of the private keys to the user.
Meanwhile, the International Monetary Fund has expressed several economic and legal reservations about El Salvador's move to make bitcoin a parallel legal tender.
El Salvador became the first country in the world to adopt bitcoin as its legal tender, with President Nayib Bukele claiming it could help Salvadorians living abroad send remittances.
The adoption of bitcoin raises many macroeconomic, financial, and legal issues that require careful analysis.
"We are following developments closely and will continue to consult with the authorities," he added.
The Fund will meet later with the country's president to discuss the law on bitcoin.
El Salvador is in talks with IMF for $ 1 billion funding.
The adoption of bitcoin in the short term will create jobs and allow financial integration into the official economy of thousands of people, said El Salvador President Nayib Bukele, like 70% of El Salvador residents who do not have a bank account.
We are living historic times but we also need to hold still and judge carefully.
Everything can be nulified, just as it was voted, this government is acting very weird and the political pressures from the IMF and the USA has led to a decision like this.
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