On September 7, El Salvador became the first country in the world to legalize bitcoin. The virtual currency will be at the same level as the US dollar, which became the official currency of the country twenty years ago. It is an initiative of President Naib Bukel Artes, who wants to create jobs and “enable fundraising for thousands of people outside the legal economy.” According to him, 70 percent of people do not have a bank account, they work in the informal sector, they are not in the financial system.
According to the government, it allows Bitcoin to save up to $ 400 million in bankruptcy. In addition to the 6.5 million people in El Salvador, about 2.5 million Salvadorans live elsewhere, mainly in the United States. They send money to relatives in El Salvador. That’s a lot of money, a fifth of GDP. It is an important pillar of the Central American economy. Last year, Salvadorans sent home $ 6 billion in the United States. If they do not have to pay transaction costs for this, they can easily save hundreds of millions of dollars every year.
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