El Salvador, the ‘Land of Volcanoes’, has taken the world by storm because of its new policy to accept Bitcoin as a legal form of payment. The decision was made public on Tuesday and the government of the South American country reportedly said that this historic move will allow many citizens access to banking and other related services for the very first time.
Moreover, experts have claimed that switching to cryptocurrency will help El Salvador save about 400 million USD that it previously had to pay to the banks as fees levied on the money sent to the country by the expatriates. Statistics show that over 1.5 million El Salvador natives now reside in other countries and when they send money home, about 5.9 billion dollars (data collected in 2020 by the World Bank) are lost as remittances. Switching to Bitcoins will surely prevent such huge fees from being levied on bank transactions.
Accepting Bitcoin as legal tender has brought a lot of media attention to El Salvador and now, the Salvadoran Twitterati are posting pictures of Bitcoin being accepted as payment at McDonald’s and several other local fast-food joints.
How did it all start?
Earlier this year, a bill was approved by the Parliament that made it legal to carry out Bitcoin transactions for all goods and services. As a follow-up to that decision, President Nayib Bukele declared that his government has already purchased 400 Bitcoins as of Monday evening. He also claimed that more Bitcoins will be coming to El Salvador very soon.
In a short yet explanatory Tweet posted on Monday, Bukule wrote that he expected all eyes to be on El Salvador for the first time in history as the country moved to accept Bitcoin as legal tender. To make the cryptocurrency available to the people of the country, the government will install about 200 teller machines specialized for Bitcoin transactions. The President has also announced a reward of thirty dollars for every citizen who chooses to adopt the cryptocurrency.
Of course, it is the popular opinion that the country is trying to promote the widespread usage of Bitcoin so that it can handle some major monetary issues. The prevailing Covid-19 pandemic has already forced the country to go through severe impoverishment, and now the government is hopeful that legalizing Bitcoin transactions will improve that condition.
