El Salvador to make bitcoin legal currency

At the Bitcoin conference in Miami, Jack Mallers, the creator of Strike, revealed he is onboarding 20,000 El Salvadorans a day to use Strike.

In a talk he talks about 3 months he spent there getting to know the locals and learning that remittences from overseas amount to 22% of the small countries GDP.

Emigrants are venturing overseas in pursuit of work and are sending dollars back to their family. El Salvador has adopted the US dollar as its reserve currency.

With 70% of the country remains unbanked, sending money home is an expensive process, both in terms of fees and time. This is why Mr Mallers has decided to focus the roll out of his global payments app on El Salvador. His app Strike uses the Lightning network to make cheap cross-border transactions.

Strike uses bitcoin and the Lightning network to make fiat payments – ideal for remittances

Having seen the positive impact of Bitcoin on his people, Nayib Bukele has submitted a proposal to make bitcoin legal tender in El Salvador.

The president should have no issues passing this bill locally, as he enjoys the support of allies in cabinet. However, this will be against the interest of central banks, as it could be the first of many dominos.

In order to mitigate the negative impact from central banks, it becomes necessary to authorize the circulation of a digital currency with a supply that cannot be controlled by any central bank and is only altered in accord with objective and calculable criteria.

El Salvador President Nayib Bukele via video at Bitcoin 2021

The move to embrace bitcoin will benefit el Salvador in other ways too: Bitcoin entrepreneurs and businesses will flock to the country to enjoy easy citizenship and tax benefits.

With bitcoin establishing itself as a currency, holders will not have to pay capital gains tax.

Nice to see some bullish news on Bitcoin this morning. But, what do you think? Could this be the first domino? Will other countries follow?

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