Salvadorean President Nayib Bukele said that the nation has adopted bitcoin as legal tender, a step he believes would create jobs and promote financial inclusion.
Bukele, Latin America’s youngest president, who is known to break from the norms, wrote on Twitter that lawmakers approved the legislation by a “supermajority.”
The 39-year-old leader has previously said that bitcoin could boost the economy, help counter El Salvador’s low banking penetration rate and facilitate faster transfers for US$6 billion of remittances a year.
Photo: Reuters
ROUT RECOVERY
The move to make the virtual coin legal tender is a rare slice of good news for the largest cryptocurrency, which is struggling to recover from a rout last month.
Central Reserve Bank of El Salvador President Douglas Rodriguez on Tuesday said in an interview with state TV that bitcoin is already used in the country and “it’s not something people need to be afraid of.”
It would not replace the US dollar, Rodriguez added.
Bitcoin has roughly halved from a mid-April record of almost US$65,000, hurt in part by billionaire Elon Musk’s criticism of the amount of energy needed by the servers underpinning it.
INVESTOR ATTITUDE
Harsher regulatory scrutiny in places such as China has also soured sentiment, and the idea that more mainstream investors would warm to it has taken a knock.
Yet the bitcoin faithful say these are temporary setbacks and that the virtual currency’s role should expand.
Bitcoin yesterday climbed 2.5 percent to about US$34,500 as of 8:05am in London, reversing earlier losses. The wider Bloomberg Galaxy Crypto Index increased about 3 percent.
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