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El Salvador is the First Country to Make Bitcoin Legal Tender

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El Salvador is the first country in the world to accept cryptocurrencies Bitcoin as legal tender. As a result, every resident who opens an account in the government’s Chivo bitcoin wallet will receive $30 in bitcoin as a gift.

 

The Central American country has recently purchased 400 bitcoins. They currently have a value of around 17.5 million euros.

El Salvador plans to buy many more, President Nayib Bukele said on Twitter. The small country had a gross domestic product of more than 24 billion dollars in 2020. But, according to the most recent figures from the World Bank, 29 percent of the population lives below the poverty line. They earn less than $5.50 a day.

Bitcoins make it cheaper for residents of El Salvador who work abroad, usually in the United States, to send money back to their families. That now costs Salvadorans hundreds of millions of dollars in commissions every year. Companies in the country will have to accept digital currency in exchange for goods and services. In addition, the government will accept bitcoins for paying taxes.

Making Bitcoin legal tender alongside the US dollar was Bukele’s plan. He also hopes that more people will be able to use the financial system in this way. Polls would show that Salvadorans are sceptical about the use of bitcoin, partly because the value can fluctuate considerably. Critics point out that it could increase the risks for financial institutions. Also, cryptocurrencies such as bitcoin would facilitate money laundering.

A bitcoin is worth more than 52,500 dollars on Tuesday. Cryptocurrency is on the rise. Bitcoin has gained more than 11 percent in value in the past seven days. That is now closer to the record level of $ 64,895 that was reached in April.

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