Goodbye dollar? El Salvador to make bitcoin LEGAL TENDER in September

The president of El Salvador, Nayib Bukele, said on Thursday that the recently passed law making bitcoin legal tender will take effect on September 7. He noted that the digital currency’s use will be optional.

The nation’s Congress has already approved Bukele’s proposal to embrace the cryptocurrency, making El Salvador the first country in the world to adopt bitcoin as legal tender.

“The use of bitcoin will be optional; nobody will receive bitcoin if they don’t want it... If someone receives a payment in bitcoin, they can choose to automatically receive it in dollars,” Bukele said.

According to the Latin American nation’s leader, salaries and pensions in the country, which has used the greenback since 2001, will continue to be paid in US dollars. He did not specify if that includes salaries paid to state workers and private sector employees.

Data from the World Bank shows that remittances to El Salvador, which relies heavily on money sent back from workers abroad, made up nearly $6 billion, or around a fifth of GDP, in 2019. That’s one of the highest ratios in the world.

“One of the reasons we passed the bitcoin law is precisely to help people who send remittances,” said Bukele, adding that the high costs of commissions will be eliminated by using the cryptocurrency.

Less than 1% of the volume of global cross-border remittances are currently made using cryptocurrencies, according to Kenneth Suchoski, US payments and fintech analyst at Autonomous Research. He says crypto will in the future account for a larger slice of the more than $500 billion in global annual remittances.

Cryptofirm Athena Bitcoin said on Thursday that it plans to invest more than $1 million to install around 1,500 cryptocurrency ATMs in El Salvador, particularly where residents receive remittances from abroad. The ATMs will be used to buy bitcoins or sell them for cash.

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