El Salvador flips a Bitcoin
The Future. El Salvador has officially made Bitcoin legal tender. The country has invested heavily in both more Bitcoin and infrastructure to support citizen adoption of the crypto, making it the test case in creating a digital economy. The world is watching El Salvador… and if successful, it may create a domino effect, especially in Latin America.
Yesterday, El Salvador officially carried through with its plan to make Bitcoin an official currency of the country (alongside the U.S. dollar) and it’s the first country to do so.
- President Nayid Bukele tweeted that yesterday was #BitcoinDay while also announcing that the country bought an additional 200 new coins.
- That brings El Salvador’s Bitcoin holdings to 400 coins — roughly 20.9 million.
- Citizens will be able to pay their taxes in Bitcoin.
- Notably, money that is exchanged into the crypto won’t be subject to capital gains taxes.
To prepare for the currency rollout, El Salvador has installed 200 Bitcoin ATMs and created its own digital wallet called Chivo, which gives users $30 in Bitcoin just for signing up.
Bitcoin has the potential to revolutionize El Salvador’s economy.
- The coin makes it easier for migrants to send money back to family members (these remittances account for 24% of the country’s GDP).
- 70% of citizens don’t have a bank account.
Unfortunately, 70% of citizens also don’t approve of the government’s plan to make Bitcoin a legal tender (even though it transformed the beach town of El Zonte, aka “Bitcoin Beach”).
We’ll see if more people warm up to using the digital currency over time. In the meantime, Panama just introduced a bill to make Bitcoin and Ethereum legal tender, so there may be no going back.