Sunday, June 20

Bukele announces that bitcoin will be legal tender in El Salvador


Correspondent in New York

Updated:

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Here’s to watching, President of The Savior, announced this weekend that the Central American country will be the first in the world to adopt the bitcoin as legal tender. Bukele made a video appearance at a bitcoin conference in Miami in which he assured that this week he will send a proposal to the Legislative Assembly of El Salvador.

«In the short term this will create jobs and help provide financial inclusion to thousands of people who are outside the formal economy and in the medium and long term we hope that this small decision will help us to push humanity at least minimally in the appropriate direction, “said Bukele, who began his assault on the presidency of El Salvador at the end of 2017 with the creation of the New Ideas party.

Bukele did not offer great details on how bitcoin will be implemented – which will have to coexist with El Salvador’s official currency, the dollar Americans – as legal tender.

Bitcoin logo at the Miami convention where Bukele announced his initiative
Bitcoin logo at the Miami convention where Bukele announced his initiative – Afp

In a series of messages on Twitter, Bukele defended that the measure could encourage foreign investment in El Salvador: “Bitcoin has a capitalization of 680,000 million dollars. If 1% of it is invested in El Salvador, that would increase our GDP by 25%, “he wrote, without explaining very well what would encourage this inflow of funds.

He also assured that the measure would benefit the cryptomoney, which would have “ten million new potential users” and the ability to facilitate the transfer of important remittances that Salvadorans residing in the US send to their country. Almost a quarter of the citizens of El Salvador work in the Northern power and send 6,000 million dollars a year in remittances. “A lot of that money is lost to intermediaries,” Bukele said. “With the use of bitcoin, the amounts received by more than a million low-income families will increase by the equivalent of billions of dollars each year.”

70% of the population, without a bank account

In addition, Bukele justified the adoption of bitcoin in that 70% of the population of El Salvador does not have a bank account and works in the informal economy. “Financial inclusion is not only a moral imperative, but also a way to grow the country’s economy, giving access to credit, savings, investments and secure transactions,” he said.

Bukele did not give indications of how he would solve the lack of attachment of the cryptocurrency to the real economy or the need for technological equipment for users, nor did he refer to the latest shocks that bitcoin has received – this weekend, aggressive actions by the Government. China- or its strong fluctuations in recent months.

Bukele adopts this measure, which has given it new relevance and raises its profile in the cryptocurrency sector, at a time when it combines high popularity in the country and a growing concentration of power. The elections last February gave his party a overwhelming majority in the Legislative Assembly, which Bukele has used to change the formation of the Constitutional Court and expel the state attorney general. Those decisions have led to the condemnation of the Biden Administration.

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