El Salvador's President Nayib Bukele said in Saturday that he plans send a bill to the country's Congress next week "that will make bitcoin a legal tender."
Why it matters: If the legislation is passed by lawmakers, El Salvador would become the first country to formally adopt the digital currency.
#Bitcoin has a market cap of $680 billion dollars.— Nayib Bukele 🇸🇻 (@nayibbukele) June 6, 2021
If 1% of it is invested in El Salvador, that would increase our GDP by 25%.
On the other side, #Bitcoin will have 10 million potential new users and the fastest growing way to transfer 6 billion dollars a year in remittances.
- "In the short term, this will generate jobs and help provide financial inclusion to thousands outside the formal economy," Bukele said in a video for the Bitcoin 2021 conference in Miami, Florida, which was posted online.
- Jack Mallers, founder of the Lightning Network payments platform Strike, which is working with Bukele on the project, noted at the conference, "Over 70% of the active population of El Salvador doesn't have a bank account. They're not in the financial system."
The big picture: Over 2 million Salvadorans live outside the Central American country and send home some $4 billion every year, with remittances making up about 20% of the country's GDP, per the BBC.
- Bukele didn't go into details on how the policy would work. But he said it would be used alongside the U.S. dollar, which the country has used as its official unit of currency since 2001.