El Salvador will become the first country in the world to make Bitcoin crypto-currency legal tender if lawmakers approved a recommendation by the president.
The Central American country’s leader, President Nayib Bukele, has suggested Bitcoin be used alongside the US dollar, El Salvador’s official currency.
This would make it easier for Salvadorans living abroad to send payments home, and open up financial services to the 70% of Salvadorans who did not have bank accounts, the president said.
According to the BBC, Bukele told a Bitcoin conference in Florida: ‘In the short term, this will generate jobs and help provide financial inclusion to thousands outside the formal economy.’ He said it could also boost investment to the country.
Bukele indicated that he would submit legislation on recognising Bitcoin to El Salvador’s congress this week.
The BBC report notes that El Salvador’s economy relies heavily on remittances, or money sent home from abroad, which make up around 20% of the country’s gross domestic product.
More than two million Salvadorans live outside the country, but they continue to keep close ties to their place of birth, sending back more than $4bn each year.
Bukele said current services often charged fees for such transfers, which could take days to arrive and sometimes needed to be picked up in person.
‘This will improve lives and the future of millions,’ he said.
Bukele did not give more details about how the policy would work.
The BBC said most of the world’s central banks were looking into the possibility of creating their own digital currencies. In April, the Bank of England announced it was looking into creating a digital money that would exist alongside cash and bank deposits.
[Image: Bukele, with his wife, Gabriela Rodríguez. Wikimedia]