In a broadcast video to the Bitcoin 2021 biggest event in history in Miami, El Salvador president Nayib Bukele announce that is looking to introduce legislation that will make the world’s first sovereign nation to adopt bitcoin as legal tender, alongside the U.S. dollar. El Salvador will partnership with Strike, a digital wallet company that builds on the Lightning Network, to build the country’s modern financial infrastructure using blockchain technology.
Jack Mallers, fonder of Strike said on stage that he had lived in El Salvador for three months and discovered that more than 70% of the population does not have a bank account, and 20% of the country’s GDP comes from remittances sent by migrants to family members.
Nayib Bukele tweet: “Bitcoin has a market cap of $680 billion dollars, if 1% of it is invested in El Salvador, that would increase our GDP per 25%. On the other side bitcoin will have 10 million potential new users and the fastest growing way to transfer 6 billion dollars a year in remittances”.
Besides, a big chunk of those 6 billion dollars is lost to intermediaries. By using Bitcoin, Nayib Bukele claim, the amount received by more than a million low-income families will increase in the equivalent of billions of dollars every year. This will improve lives and the future of millions of Salvadorians. Financial inclusion is not only a moral imperative, but also a way to grow the country’s economy, providing access to credit, savings, investment, and secure transactions.
El president hopes that this decision will be just the beginning in providing a space where some of the leading innovators can reimagine the future of finance, potentially helping billions of peoples around the world.
El Salvador is one of a few non-U.S. nations that uses the U.S. dollar as its official currency. Tension has risen recently between the Central American nation and the United States over El Salvador’s recent shakeup of its justice system. In May, the U.S. Agency for International Development (USAID) said “it will redirect funding away from El Salvador’s institutions (including its Attorney General’s office) and give it instead to local human rights organizations”.
If Bukele’s Bitcoin bill goes through, El Salvador will be the first nation to officially recognize Bitcoin as legal tender.