biteaBitcoin becomes Legal Payment Method in El Salvador

Bit Team
3 min readJun 10, 2021

The Parliament of El Salvador has approved a bill on the legal tender of Bitcoin in the country. This was stated by President and head of Government Naib Bukele in his official Twitter profile, indicating that the approval was received by an overwhelming majority, almost 74% of the votes.

A new chapter in BTC history

Bukele is the head of the ruling party, which has an overwhelming majority in parliament, so his proposal was approved more than expected.

The president also tweeted out the entire text of the approved law, from which it is clear that Bitcoin in the country will also be a compulsory tender, since this text explicitly states that all “economic agents” are required to accept BTC as a means. payments.

For example, one of the curious consequences of this law is that, for example, Tesla will be forced to accept payments in the PTS even against its will, if it makes a sale on the territory of the Central American state.

El Salvador does not have its own national currency, because its colon currency (SVC) is now out of circulation. At the moment, they use the US dollar, but with this new law, the US dollar will actually be joined by BTC, since without fail, anyone in the country requesting payment will be forced to accept both currencies.

El Salvador is a small country with only 6.5 million people and a very small economy, as it ranks 101st in the world in terms of GDP, but if similar decisions are made in other countries, the consequences could be significant.

The fact is that several parliamentarians from other states, especially from Latin America, have expressed a desire to discuss the possibility of accepting bitcoin as legal tender in their countries, starting with Paraguay, but also passing through major countries such as Brazil, Mexico and Argentina. .

In fact, many Latin American countries have problems with their national currencies: from Venezuela, whose bolivar is now devalued, to Argentina, whose peso has devalued 30% against the dollar in the past 12 months. Or Brazil itself, where inflation rose from 2% to more than 6% last year.

Paraguay is going to make an important announcement concerning BTC

This was announced by local MP Carlitos Reyala in a tweet in which he says that an important project to introduce innovation in the country will begin this week, with reference to BTC and PayPal.

While there is no evidence that this is in any way related to the possibility that Bitcoin will be declared legal tender in the country, the fact that Rehala’s statements were made just two days after the El Salvador president’s announcement may indicate some connection.

Reichal himself, on his official Twitter profile, shared a retweet of last year’s tweet by President Nayib Bukele, which clearly inspires Reichal.

However, the difference is that Paraguay has its own local currency-the guarani (PYG), while in El Salvador the currency is outdated and actually uses only US dollars.

So perhaps, rather than seeking to have Bitcoin declared legal tender, Paraguay may be more interested in the potential benefits of Bitcoin loyalty.

In particular, by eliminating the capital gains tax, many crypto companies may be interested in moving their headquarters to these countries, which will allow them to attract new business.

We are talking about countries with very low GDP per capita. Paraguay ranks 97th out of 193 in the world with an income of about $6,000 per citizen per year, while El Salvador ranks 118th with $4,000.

Of course, for these countries, attracting business is crucial, and simply becoming Bitcoin-friendly may be the real goal of such initiatives.

Moreover, Justin Sun, for example, has already announced that Tron will open an office in El Salvador.

Read completely —