As of today, it is possible in the Central American country of El Salvador to make payments with the cryptocurrency bitcoin. This makes the country the first country in the world to introduce bitcoin as legal tender.
“For the first time in history, all eyes will be on El Salvador,” President Nayib Bukele tweeted yesterday. He immediately announced that the country had purchased its first 200 bitcoins.
According to the head of state and his government, bitcoin will allow Salvadorans to save $400 million in bank charges when sending money through the diaspora. In El Salvador’s economy, which runs on the US dollar, remittances by Salvadorans from abroad are major support, accounting for 22 percent of gross domestic product (GDP).
However, two-thirds of Salvadorans in two different polls were in favor of keeping only the US dollar as legal tender.
Economists and financial institutions such as the World Bank and the International Monetary Fund (IMF) are also skeptical about the measure. They are particularly concerned about the high volatility of cryptocurrency.