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El Salvador is the first country to adopt Bitcoin as its official currency

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It is official, as of today, Bitcoin is the official currency of El Salvador along with the US dollar. The country’s populist president Nayid Bukele tweeted that the country was about to “make history” with the move, after confirming that the country had purchased 400 Bitcoins, equivalent to about $20.9 million at today’s prices.

Supporters say the measure will make it cheaper and easier for migrants to send money to El Salvador, which is important as these remittances represent more than 24% of the country’s gross domestic product, according to World Bank data. disclosed. There are hopes that the change will improve citizens’ access to financial services. The CEO of Strike, a digital finance company that helped with the logistics of the new law, said more than 70 percent of the country’s “active population” does not currently have a bank account.

But there are those who fear that the adoption of such a historically volatile currency could harm Salvadorans and jeopardize economic stability. Bitcoin hit an all-time high of over $60,000 in April, before losing nearly half its value in a late-summer crash.

Citizens will be able to pay taxes in Bitcoin and stores will be able to display prices in digital currency. Money converted into currency will also not be subject to capital gains taxes.

El Salvador has been preparing to support the cryptocurrency for several months, after passing the legislation in June. Last month, it began installing 200 ATMs across the country to allow citizens to convert between the country’s two official currencies. It also launched its own digital wallet called “Chivo”, which rewards users with US$30 in free Bitcoins.

Despite all the initiatives, the evidence shows that few companies are ready for this big change. More than 20 companies in the country’s capital were interviewed and only three said they had immediate plans to accept the currency.

Source: CNN

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