Bitcoin to Become Legal Tender in El Salvador, President Nayib Bukele to Send Bill

El Salvador's President Nayib Bukele said on Saturday that he will send a bill to Congress next week to make Bitcoin legal tender in the Central American nation, touting its potential to help Salvadorans living abroad send remittances home.

"In the short term this will generate jobs and help provide financial inclusion to thousands outside the formal economy," Bukele said in a video shown at the Bitcoin 2021 conference in Miami.

Strike, a mobile payments app that launched in El Salvador in March, said in a statement that it welcomed the legislation and was working with the country to make using Bitcoin technology a success.

“This is the shot heard 'round the world for Bitcoin," Strike founder and CEO Jack Mallers, who introduced Bukele's video, was quoted as saying at the Miami conference.

"Adopting a natively digital currency as legal tender provides El Salvador the most secure, efficient and globally integrated open payments network in the world," Mallers said.

Bukele took to Twitter to call promoting financial inclusion "a moral imperative" as well as path to growing El Salvador's economy by providing access to credit, savings, investment, and secure transactions.

On the issue of remittances, Bukele said that currently "a big chunk of those 6 billion dollars (roughly Rs. 43,680 crores) is lost to intermediaries. By using Bitcoin, the amount received by more than a million low income families will increase in the equivalent of billions of dollars every year."

He pointed out that 70 percent of El Salvador's population does not have a bank account and works in the informal economy.

"This will improve lives and the future of millions," said Bukele.

© Thomson Reuters 2021