Jun 6, 2021 - Economy

El Salvador's president announces plan to make bitcoin legal tender

Nayib Bukele, El Salvador's president, delivers a speech to Congress at the Legislative Assembly building in San Salvador, El Salvador, on Tuesday, June 1, 2021.

El Salvador's President Nayib Bukele in the Legislative Assembly building in San Salvador, El Salvador, last Tuesday. Photo: Camilo Freedman/Bloomberg via Getty Images

El Salvador's President Nayib Bukele said Saturday he will send a bill to the Central American country's Congress next week to make bitcoin legal tender.

Why it matters: If the legislation is passed by lawmakers, El Salvador would become the first country to formally adopt the digital currency.

  • Jack Mallers, founder of the Lightning Network payments platform Strike, which is working with Bukele on the project, noted at the Bitcoin 2021 conference in Miami, Florida, Saturday: "Over 70% of the active population of El Salvador doesn't have a bank account. They're not in the financial system."

What they're saying: Bukele said in a video message to the conference that in the short term, formally adopting bitcoin "will generate jobs and help provide financial inclusion to thousands outside the formal economy."

The big picture: Over 2 million Salvadorans live outside the country and send home some $4 billion every year, with remittances making up about 20% of the country's GDP, per the BBC.

  • Bukele didn't go into details on how the policy would work. But he said it would be used alongside the U.S. dollar, which the nation has used as its official unit of currency since 2001.

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