El Salvador is the first country in the world to make Bitcoin legal tender. Many analysts predict that governments will closely monitor El Salvador to see if the move is in line with its goals.
Bitcoin as Legal Payment Will Soon Go Viral
“History!” tweeted El Salvador’s president, Nayib Bukele, on June 9, before changing his profile picture to one with laser beams falling from his eyes.
The world leader’s somewhat surreal message was a response to El Salvador becoming the first country in the world to introduce a law recognizing Bitcoin, the world’s most popular (and expensive) cryptocurrency, as legal tender.
The text of the law states that “every economic agent must accept Bitcoins as payment at the request of the buyer of a good or service,” although this excludes anyone who does not have “access to technologies that will allow them to conduct transactions.” And today it is the majority of the country’s population. Taxes can be paid in BTC, and any debts previously owed in US dollars, El Salvador’s main currency, can now be paid in Bitcoin. Residents of El Salvador can use any digital wallet, including the new “official” one authorized by the government.
This is a big staggering step for the country, its people, and financial systems around the world. Forbes notes this as follows:
“Turn El Salvador into one of the most important financial centers in the world and influence how people around the world will use cryptocurrencies.”
A key question will be whether other countries will follow suit, and many analysts predict that governments will closely monitor El Salvador to see if the move is in line with its goals, which include:
- allowing money transfer transactions without third-party fees, which will add approximately $ 1 billion to the economy;
- ensuring higher rates of smartphone transactions and financial accessibility for those not covered by banking services;
- attracting investment from cryptocurrency companies and others.
Which countries are most likely to accept BTC as a payment method?
The contenders may include nearby Panama and Paraguay, which intend to consider bills aimed at supporting cryptocurrencies and crypto businesses. So are Latin American countries: Mexico, Colombia, Argentina and Brazil, where crypto enthusiasm is high, and the economy is struggling with problems of inflation and currency devaluation.
Although not in the near future, but they can join:
- Nigeria and the Philippines, which rank first and third in terms of the number of crypto users as a percentage of their population;
- Ukraine, which has recently taken steps to include cryptocurrencies in its legal system;
- Japan, which has strict regulatory oversight of its crypto industry, and already considers cryptocurrencies to be legitimate property.
El Salvador’s decision to recognizeBitcoin as legal tender is certainly historic, and its early supporters are seeking victory. El Salvador is a very poor country, but it will certainly attract the attention of leaders around the world, who will look very carefully for signs of success.
If El Salvador can demonstrate to the world an improved economic environment for its people, other developing countries and Second World countries can rush to follow the example of the Latin American country.
The encouraging developments towards wider adoption of Bitcoin are not limited to poorer countries. India, a G20 member with a $10 trillion economy, is reportedly close to classifying Bitcoin as an asset class.
It’s important to remember that Bitcoin bulls have been holding onto their coins for over a decade. In the meantime, there will certainly be spikes in volatility, but the long-term outlook for the BTC continues to improve every year.