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El Salvador approves first law for bitcoin as legal money

A Bitcoin banner is seen outside a small restaurant at El Zonte Beach in Chiltiupan, El Salvador June 8, 2021. REUTERS/Jose Cabezas/File Photo

El Salvador became the first country in the world to officially adopt bitcoin after Congress approved President Nayib Bukele’s proposal to accept the digital currency.

With 62 out of 84 possible votes, most lawmakers voted in favor of the initiative to create a law that would officially adopt bitcoin. Although there are concerns about the potential impact of El Salvador’s project on the International Monetary Fund. Read more

Bukele has touted the use of bitcoin as having the potential to help Salvadorans living abroad to send money home. While saying that the US dollar will remain the legal money

“It will bring financial integration, investment, tourism, innovation and economic development to our country,” Bukele said in a tweet ahead of the congressional vote. which was controlled by his party and allies.

He added that using bitcoin as an alternative would not bring risks to users. Use as a legal tender will take effect in 90 days.

“The government will guarantee the ability to convert to a certain value in dollars at the moment of each transaction,” Bukele said.

El Salvador’s dollar economy relies heavily on remittances from overseas workers. World Bank data shows that nearly $6 billion, or about a fifth of GDP, was remitted to the country in 2019, one of the highest in the world.

Experts say the move to bitcoin could complicate negotiations with the IMF, where El Salvador is looking at more than $1 billion in projects. Read more

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