Last weekend, in an unprecedent move during Bitcoin 2021 Miami Conference, the president of El Salvador Nayib Bukele announced on video to the participants that he would propose a law to be voted by the country's Congress that would make Bitcoin a legal tender. The news, was one of the most major announcements we have ever seen in crypto-space. No other country had done that before. Making a cryptocurrency a legal tender!
To those that ask what is a legal tender, I am attaching you the definition for Investopedia
Legal tender is anything recognized by law as a means to settle a public or private debt or meet a financial obligation, including tax payments, contracts, and legal fines or damages. The national currency is legal tender in practically every country. A creditor is legally obligated to accept legal tender toward repayment of a debt. Legal tender is established by a statute which specifies the thing to be used as legal tender and the institution that is authorized to produce and issue it to the public
The bill got 62 votes from the sitting 84 Congress deputies passing with a supermajority. Now, it has been officially published in the country's Official Gazette which means that we are only 90 days away from a new future. Some of the points raised by the government included that such move would lead to further financial inclusion since 70% of the population do not have access to traditional financial services as stated in the bill. The bill allows for the citizen to use any wallet their want. Nevertheless the government will prepare its own payment wallet with the support of Lighting Network company Strike.
The move from the El Salvadorian president will generate a lot of interest in the crypto and investment community to explore opportunities of setting up branches and operations in El Salvador. We will definitely see crypto-entrepreneurs and advocates either moving or advocating fiercely for El Salvador! Furthermore, in a Twitter livestream Bukele admitted that his country was thinking of the promoting Bitcoin mining but by using environmental friendly energy resources such as geothermal energy from volcanoes.
What does the future hold?
This presents a number opportunities for crypto. It is certain that other politicians from different countries will be interested to take a similar approach to El Salvador so that they are not left behind, especially if the experiment is successful.
Already various politicians from different Latin American countries (Panama, Argentina, Brazil, Nicaragua, etc) have changed their Twitter profiles by adding the Bitcoin popularised "laser eyes" avatars, although their governments have not taken any official stance until now. It could be it that only a couple of politicians and congress members showed support by flipping their avatars, but this is how everything new starts. This does not mean that policies are being discussed or implemented in these countries nor that adoption plans are being prepared on paper, but it is a positive indication on what could follow.
Let me ask you something simple: How many people were part of the Community and joining Bitcoin events in the early 2010s and how many are now?
In my mind this is similar, interest generated by politicians, policy makers, governments, and financial institutions for crypto is growing in a healthy pace.
Then, after Bitcoin, I do not see why El Salvador, or other countries that will follow through with this, will stop at Bitcoin and not accept other cryptocurrencies as legal tender, especially some of the old and most proven ones that have lower fees than BTC (bar LN) now. Thus, we could see Ethereum and others being added to the pool of legally accepted tender.
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