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El Salvador Intends To Make Bitcoin Legal Tender.
El Salvador

El Salvador Intends To Make Bitcoin Legal Tender.

If his plan is approved by Congress, Central America will be the first country in the world to formally adopt digital currency.

El Salvador's official currency, the US dollar, would be used alongside it.

According to President Nayib Bukele, Bitcoin will make it easier for Salvadorans living abroad to send money back home.

"In the short term, this will generate jobs and help provide financial inclusion to thousands who are not part of the formal economy," Mr Bukele said at a Bitcoin conference in Florida, adding that it could also boost investment in the country.

He stated that the bill would be sent to Congress the following week.

The president stated that if the bill is approved, it will provide financial services to the 70% of Salvadorans who do not have bank accounts.

El Salvador's economy is heavily reliant on remittances, or money sent home from abroad, which account for approximately 20% of the country's GDP.

More than two million Salvadorans live outside the country, but they maintain strong ties with their homeland, sending more than $4 billion (£2.9 billion) back each year.

According to the announcement, current services may charge fees for such transfers, which can take days to arrive and sometimes require personal pickup.

"This will improve millions of people's lives and futures," Mr Bukele said.

He did not elaborate on how the policy would be implemented.

Bitcoin, a virtual asset with no direct link to the real economy, has experienced significant value fluctuations over the years.

The majority of the world's central banks are investigating the possibility of developing their own digital currencies, with the Bank of England announcing in April that it was considering developing a digital currency that would exist alongside cash and bank deposits.
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