El Salvador’s President Nayib Bukele’s proposal was officially accepted bu the country’s Congress to embrace cryptocurrency as legal tender, making it the first country in the world to do so.
With over 70 percent of lawmakers voting in favor, the mainstream acceptane of bitcoin is seen as a changemaker to spur investment, tourism and financial stability for the nation.
The use of bitcoin will be optional for consumers with the government converting it to the current dollar rate.
El Salvador’s economy relies heavily on remittances and is tied to the US dollar, so the use of cryptocurrency may be in tandem with the continued use of dollars as legal tender for the country’s reserves.
Remittances accounted for nearly 20 percent of the country’s GDP in 2019, one of the highest ratios in the world, according to World Bank data.
This latest development is being closely watched by the IMF, from whom the country is seeking $1 billion program, with experts saying this could potentially complicate the discussion.