It's a historic day for Bitcoin and Cryptocurrency space because El Salvador's government just passed a bill to adopt bitcoin as a legal tender in the country. The announcement was made by El Salvador's President Nayib Bukele on Twitter today. Laser Eyes :') This ecosystem is growing at a rapid pace. Earlier it were retail investors, then in 2020-21, institutions chipped in. Now we witnessing soverign countries adopting crypto. This event is quite important in the history of bitcoin. I am sure many of us didn't even know the country existed before seeing this news. It has adopted such an innovative technology and now the whole world is talking about them.
#BitcoinLaw Is Approved!
What's A Legal Tender?
In simple words, a legal tender is an officially recognized payment instrument, used to satisfy the financial commitment. Something that is valid for the payment of debts. The best example is the currencies we use in our countries like USD, EURO, INR, AUD, etc. El Salvador is probably the only country that is going to work with two kinds of legal tenders i.e. USD which is inflationary and Bitcoin which is deflationary. It's going to be an interesting experiment that could potentially improve their economy.
Possible After Effects To This Event
- Others will start realizing and analyze the fact that this is something they can also do in their countries. Especially those with poor economies and relying on other currencies like El Salvador which use USD as its official currency.
- El Salvador offers citizenship to Bitcoin HODLers. This is a great way to attract entrepreneurs and talent from all over the world to live and work in the country.
The president also announced that they are working with Strike to create a free to use bitcoin wallet for the citizens of the country. It's a crypto payments processor developed by Chicago-based startup Zap Solutions owned by Jack Mallers. This could help bitcoins users to onboard the network and use bitcoin easily.
President also announced that they are looking to possibilities of mining bitcoin using 'cheap and clean' energy from active volcanos. This could act as a new and unique source of revenue for the government.
Country will also acquire $150 million of bitcoin and HODL from individuals and businesses who accept it but need help in exchanging the currency. It will quickly support these investors to focus on building their wealth and allow other to develop systems that could benefit everyone.
El Salvador has chosen freedom because their economy will not be dependent on USD anymore. US Government is printing USD like crazy. 20-25% USD that is currently in circulation was created in the last two years. There are so many countries which depend on USD alone. Inflation issues are not in their hands to solve which poses a huge risk on their economies. By adopting bitcoin they have ensured that no single entity controls it. And there will only be 21 millions BTCs printed. Bitcoin will act as an edge for them apart from USD. Very soon, we are going to see a few countries follow the same path as El Salvador's. It will be interesting to see the growth in economy of the country in the next 1 or 2 years. It's definitely a positive sign for the entire sector.
What do you guys think about it? Let me know in the comments!
