Several news outlets have reported that El Salvador’s Congress already approved Bukele’s proposal to embrace the cryptocurrency, making El Salvador the first country in the world to adopt bitcoin as legal tender.
El Salvador’s President Nayib Bukele said in a national address on Thursday that the recently passed law making bitcoin legal tender will take effect on Sept. 7. He also notes that its use will be optional.
Bukele also states that salaries and pensions will continue to be paid in US dollars, although he did not specify if that included salaries paid to state workers and private sector employees.
As per one of Bukele’s statements; one of the reasons they passed the bitcoin law is to help people who send remittances, adding that the high costs of commissions traditionally associated with sending money home would be eliminated by using the cryptocurrency.
For those not in the know, El Salvador relies heavily on money sent back from workers abroad. According to the World Bank, their data showed remittances to the country made up nearly $6 billion, or around a 5th of gross domestic product (GDP) in 2019 – allegedly one of the highest ratios in the world.
As it is, the world is now watching to see how Bitcoin will work in El Salvador now that it has been officially declared as legal tender.