El Salvador’s President Nayib Bukele said Saturday that he would send a bill to Congress next week to make Bitcoin legal tender in the country.
“In the short term, this will create jobs and help bring financial inclusion to thousands outside of the formal economy,” said Bukele in a video shown at the Bitcoin 2021 conference in Miami.
Introduction of Bitcoin in El Salvador
El Salvador is working to bring bitcoin technology to life with Strike, a mobile payments app launched in the country in March.
“Over 70% of the active population of El Salvador do not have a bank account. You’re not in the financial system, ”said Jack Mallers, founder of the mobile payments app, at the conference on Saturday.
“The introduction of a native digital currency as legal tender offers El Salvador the safest, most efficient and globally most integrated open payment network in the world,” added Mallers.
What is bitcoin
Bitcoin is a privately owned cryptocurrency that operates independently from governments.
Bitcoin transactions are digitally verified through the use of blockchain technology, which is tied to a global computer network rather than a server, which makes them less susceptible to fraud. This is also the process that enables the mining of new coins, although there is a cap on the creation of new bitcoins – 21 million – a number that is expected to be reached by 2040.
Bitcoin rose from $ 0.0008 to $ 0.08 in the first five days of launch and has soared to nearly $ 60,000 this year before plummeting 40% last month.
Digital currencies appear to be the future as some countries, including China, are currently testing their own digital currency. Many financial analysts believe that the blockchain technology behind currencies like Bitcoin will be useful for introducing digital versions of existing government-backed currencies.
However, cryptocrites believe that the wild volatility in the values of Bitcoin, Ether, and others is hindering the adoption of these currencies by making it difficult for companies to accept them for payment for goods and services.
kmm / sri (dpa, Reuters)