El Salvador Moving To Adopt Bitcoin As Legal Tender

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Coins on a computer
Coins on a computer. Image credit: Phongphan/Bigstock.com

The president of El Salvador introduced a plan to recognize Bitcoin as legal tender. The president — Nayib Bukele says that the move will make it easier for people to send money home to their families. 70% of the Central American country’s population does not have banking services.

The issue of banks discriminating against people (as well as surveillance laws making it harder to get a bank account) is widespread. El Salvador is one of many countries with a large number of unbanked people. The country currently uses the U.S. dollar as their official currency and Bitcoin will be used alongside it if congress approves the law.

Banking is an inherently fragmented concept that makes international transfers expensive, cumbersome, and even impossible in some cases. For international wire transfers to occur, the bank you are sending from must have partner banks in the receiving country. The resulting fees are sky high, and the transfers are painfully slow.

Bitcoin can be sent effortlessly anywhere in the world without making complex inter-bank arrangements or using intermediaries. This change would be a breath of fresh air for anyone sending or receiving funds in El Salvador — provided that the currency can easily be exchanges or used to buy things. That’s where its recognition of Bitcoin as legal tender comes in — it enables people to pay debts, taxes and other expenses with Bitcoin.