El Salvador has made Bitcoin (BTC) legal tender. This is the first country in the world that made the largest cryptocurrency legal tender. The bill has been passed in El Salvador Congress and after 90 days it would become legal tender.
El Salvador making Bitcoin legal tender has a large impact on many economic and social matters in the country. In this post, we will discuss why this bill is important and what are its main characteristics.
What does it mean that El Salvador made Bitcoin legal tender? This is a very good question and the main topic of this post. Let’s start from the beginning. Bitcoin is the largest cryptocurrency in the world. It is decentralized, which means that it has no central bank or centralized authority controlling its total supply or printing speed. At the same time, it has a limited supply of 21 million BTC.
El Salvador became the first country that decided to adopt Bitcoin as a legal tender. That means that prices in shops can be expressed in Bitcoin and taxes can also be paid in BTC. At the same time, the President of El Salvador, Nayib Bukele, informed that they would also like to mine Bitcoin with energy from volcanoes.
Bukele believes that the initiative could be very positive for the country, where billions of dollars in remittances come from the United States each year.
“It will bring financial inclusion, investment, tourism, innovation and economic development for our country,” stated Bukele.
Becoming legal tender also means that it would be necessary for all the shops in the country to start accepting Bitcoin alongside the U.S. dollar, which is the other legal tender currency in the country. As we can see, El Salvador does not have its own currency.
Companies and firms are now working not only to be compliant with the new law but also to educate the population on how to use virtual currencies and digital assets but more specifically Bitcoin and the Lightning Network (LN).
Bitcoin is already a real currency. That means that it can be used to make payments or to send money across borders. Users from all over the world can use Bitcoin not only to pay for goods and services but also as a store of value.
That means that you would be able to use Bitcoin not only as a means of payment but also as a way to avoid inflationary currencies controlled by central banks and financial institutions around the world.
Bitcoin could expand to other countries in the future. It is possible to use not only Bitcoin but Satoshis in order to make transfers. Satoshis are smaller Bitcoin units as cents work for the U.S. dollar. Each Bitcoin is subdivided into 100,000,000 satoshis that could be used to pay for things.
Bitcoin is a currency that does not know borders. That means that you can send Bitcoin to another person or company in another country in just minutes (or seconds if you use LN) and without intermediaries. Everything is done in a decentralized way.
Let’s say that a company in El Salvador is selling services to a company in Europe. El Salvador will be able to receive a payment in BTC in just seconds. Without having to rely on bank transfers, or anything similar.
The fees of the Bitcoin network depend on the congestion. However, fast transfers can be processed using a secondary layer such as the Lightning Network. In this way, transfers are processed fast and without paying high fees.
Bitcoin is now legal tender in El Salvador after it became the first country in the world to make it legal tender. This is certainly a positive thing for the entire crypto market and the whole industry that is now looking forward to new countries adopting Bitcoin as legal tender.
Although there are no other countries that announced they are planning to make Bitcoin legal tender, it is possible to see many other nations adopting Bitcoin as a means of payment in an official way.
Despite that, there are thousands of shops around the world that are accepting Bitcoin and other virtual currencies as a means of payment. Moreover, exchanges and Bitcoin ATMs are also making it possible for individuals in many countries to use digital assets in a fast and easy way.
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