El Salvador has passed a resolution making Bitcoin a legal tender, making it the first country in the world to do so (via The Guardian). Citizens will be able to use Bitcoin for everything from paying taxes and obligations to purchasing products and services, according to the law. President Nayib Bukele championed the idea, claiming it will benefit individuals who don’t have access to banks and those who want to send money back to the country from abroad, but critics fear it would be more show than substance.
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Following Bukele’s announcement at a Bitcoin conference in Miami last week, the proposal was passed by El Salvador’s congress on Tuesday night. With 62 out of 84 legislators voting for it, it wasn’t a tough call, but it’s worth noting that Bukele wields significant political power in the country – his party controls the majority of the congress, allowing him to assume control of much of the government earlier this year.
While Bitcoin will become El Salvador’s official currency in less than three months, it will not be the only option. The US dollar, which was previously the country’s only currency, will remain an option, though Bukele told Crypto news that he wants the country’s citizens to think about money in terms of Bitcoin, not dollars. Citizens should be allowed to exchange between the two currencies at any time, according to the resolution, and US dollars will be utilized as the accounting reference currency.
According to The Guardian, some Central American human rights organizations are skeptical that Bitcoin’s adoption would result in substantial change for many of the country’s residents. One issue is that the countries poor may lack access to the technology needed to use and store Bitcoin. While the law mandates that anybody selling goods or services accept Bitcoin, it makes an exception for individuals without access to the technology. The law does provide, however, that the government will “promote the required skills and mechanisms” to enable the general public to utilize Bitcoin.
The country isn’t now a major Bitcoin mining hotspot, according to University of Cambridge estimations, and isn’t even in the top ten. El Salvador’s contributions account for 0.001% of the global computing power dedicated to Bitcoin, according to the university’s map. Bukele, on the other hand, has tweeted that the state-owned electric firm has been ordered to supply cheap electricity for mining, which will be generated by volcanoes (no, that’s not a joke).