El Salvador Expected to Become First Sovereign to Adopt Bitcoin as a Fiat Currency

The Republic of El Salvador is seeking legislation that would make it the first sovereign nation in the world to adopt bitcoin as legal tender along with the U.S. dollar.

El Salvador Expected to Become First Sovereign to Adopt Bitcoin as a Fiat Currency

The Republic of El Salvador is seeking legislation that would make it the first sovereign nation in the world to adopt bitcoin as legal tender alongside the U.S. dollar.

In a video broadcast provided to the Bitcoin 2021 conference, President Nayib Bukele announced that El Salvador has partnered with digital wallet company Strike to build the country’s modern financial infrastructure using Bitcoin technology.

Note: The Bitcoin 2021 Conference is a multi-day conference in Miami that is being billed as the largest Bitcoin event in history.

“Next week I’m introducing a bill to Congress to make bitcoin legal tender,” Bukele said.

Jack Mallers, founder of Strike, the Lightning Network payments platform, said this will be the “shot heard around the world” for bitcoin.

“What’s revolutionary about Bitcoin is that it’s both the greatest reserve asset ever created and a superior cryptocurrency network. Holding bitcoin provides a way to protect developing economies from the potential impact of fiat currency inflation,” Mallers continued.

Mallers said the move will help unlock the power of Bitcoin and its potential as an open network of everyday use cases that benefit individuals, businesses and public sector services alike. Notably, Bukele also changed his Twitter avatar to the laser eye image popular in the crypto space.

El Salvador is a cash-based economy, with about 70 percent of the population not having a bank account or credit card. Migrants repatriate more than 20 percent of El Salvador’s gross domestic product. Existing services charge 10% or more for these international transfers, which sometimes take days to arrive, and sometimes require in-person withdrawals.

Bitcoin is not backed by assets, nor is it fully trusted or backed by any government. Its value stems in part from its digital scarcity, and its supply will be only 21 million.

CNBC has learned that while details on how the bill will be introduced in the country have not been released, El Salvador has formed a bitcoin leadership team to help build a new financial ecosystem with bitcoin as a foundational layer.

Bukele’s New Ideas party controls the country’s Legislative Assembly, so there is a good chance the bill will pass.

“It’s inevitable, and it’s happening: El Salvador has become the first country on track to make bitcoin legal tender.” Adam Back, CEO of Blockstream, put it this way.

Back said he plans to contribute technologies like Liquid and satellite infrastructure that will make El Salvador a global model.

“We’re excited to help El Salvador on its journey toward bitcoin standard adoption,” he said.

This isn’t El Salvador’s first foray into bitcoin. In March, Strike launched its mobile payment app in the country, which quickly became the most downloaded app.

Bukele’s popularity is high, and his New Ideas party won big in the recent elections. However, the new parliament recently came under fire after the removal of the justice minister and senior judges, a move that prompted the U.S. Agency for International Development to withdraw aid to El Salvador’s national police and a public information agency and instead redirect funds to civil society groups.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/el-salvador-expected-to-become-first-sovereign-to-adopt-bitcoin-as-a-fiat-currency/
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