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· Posted on
February 21, 2024

El Salvador is the first country in the world to accept Bitcoin as legal tender

Thanks to forward-thinking President and crypto fan Nayib Bukele, El Salvadorans will be able to pay with Bitcoin.

What's the key learning?

  • El Salvador's President, 40-year-old Nayib Bukele, hasdecided to allow his country to make everyday purchases with Bitcoin
  • Bukele is hoping the move will save El Salvadorans billions of dollars on remittances
  • It could either spurn on a chain reaction of countries adopting Bitcoin, or expose it for its shortfalls.

Background: El Salvador is in Central America, between Honduras and Guatemala. And it has a pretty forward-thinking President: 40-year-old Nayib Bukele. He's a crypto fan, and he's decided to allow his country to make everyday purchases with Bitcoin. Huge.

What happened: The Government's been busy installing crypto ATMs. It will allow crypto to be converted into dollars and withdrawn without commission.  

What else: Bukele is hoping the move will save El Salvadorans billions of dollars on remittances (aka payments sent as gifts from overseas). These payments make up US$6 billion - or 23% - of El Salvador's GDP.

So what's the key learning?

💡El Salvador is the guinea pig. They are experimenting whether Bitcoin can actually work as legal tender, and other countries are watching closely. It could either spurn on a chain reaction of countries adopting Bitcoin, or expose the crypto for its shortfalls.

💡Whatever happens, this is a big step for crypto. It's created a whole new world of alternative financial services, which could facilitate remittances from abroad and attract Bitcoin whales to the country.

💡But not everyone's convinced - because we know crypto can be volatile. In fact, El Salvador was seeking US$1 billion in finance from the International Monetary Fund...but the crypto move may have put this on pause.

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