El Salvador Sets the ball rolling as it Moves To Legalize Bitcoin
El Salvador’s president, Nayib Bukele plans to issue a bill to legalize bitcoin in the country. These acts will make El Salvador the first sovereign country to adopt bitcoin as a legal currency in addition to the American dollar.
President Bukele in the biggest Bitcoin event (Bitcoin 2021) in Miami announced the countries collaboration with a digital wallet company, Strike. The partnership’s goal is to build the country’s financial system using blockchain technology.
President Nayib to Send a Bill to Legalize Bitcoin
“Next week,” the president said, “I will send to the congress a bill that will make bitcoin a legal tender.”
Jack Mallers, Strike’s founder said that this act will go down as the ‘short herd’ around the world of bitcoin.
“What’s transformative here,” he continued, “is that bitcoin is both the greatest reserve asset ever and it’s a supreme monetary network. Hodling bitcoin provides a way to protect developing economies from potential shocks of offline currency inflation.
Speaking from the main stage, Jack said the move will release the monumental power of bitcoin for everyday use cases. To clarify, this will be on an open network benefiting individuals, businesses, and the public sector services.
The sovereign country has a large cash economy where approximately 70% of people don’t have bank accounts or credit cards. Moreover, remittances account for more than 20% of the county’s gross domestic product (GDP)
Binding services may charge 10% or even more in fees for the international transfers, which sometimes take days to arrive, and sometimes require a physical pick-up.
Bitcoin a Monumental Cryptocurrency
Bitcoin crypto isn’t backed by any asset nor is it backed by any government. Bitcoin’s digitally scarce. This means the technology used to make it is deflationary in nature. Only 21 million bitcoins will ever be in existence.
While more information on this is still forthcoming, CNBC was told El Salvador assembled a team of bitcoin leaders to help in building a new financial ecosystem with bitcoin as the foundational layer.
Jack’s Novel Ideas Party has access to the country’s Legislative Assembly. What this means is a passage of the bill is highly likely.
CEO of Blockstream, Adam Back, said, “It was unavoidable, but we’re the first country on track to legalize bitcoin.” Adam said he plans to provide tech’ like Liquid and satellite infrastructure to make El Salvador a model country for the world.
He said, “We are pleased to aid El Salvador on its journey in legalizing bitcoin.”
The First Move to Legalize Bitcoin
However, this wasn’t the country’s first move to legalize bitcoin. In March, the lightning network of payments platform, Strike launched its mobile app there. Soon it swiftly became the #1 downloaded app in the country.
El Salvador’s president has been quite popular, with his famous New Ideas Party sweeping the latest elections. Nevertheless, the modern assembly lately came under fire after it expelled the attorney general and top judges. This act coaxed the American Agency for International Development to ask for help from El Salvador’s national police and public information institute, instead of re-routing funds to civil society groups.
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