El Salvador Wants to Make Cryptocurrency a Payment Instrument

President Nayib Bukele of El Salvador has promised to make Bitcoin the official currency of the country. If Parliament approves this plan, El Salvador will be the first state in the world to give a cryptocurrency a similar status.

El Salvador, a small country in Central America, does not have its currency and uses the United States dollar as payment currency. President Bukele stated that recognition of Bitcoin would make it easier for nationals working abroad to send money home. «In the short term, this will lead to the creation of new jobs and will help to attract to the financial world thousands of people living outside the formal economy», said the head of El Salvador during a conference dedicated to Bitcoin in Florida.

Bukele promised to submit a bill to the Salvadoran Congress the following week to recognize Bitcoin as a means of payment formally.

The economy of El Salvador depends to a large extent on the resources that nationals abroad send home. This money accounts for about 20% of the state’s GDP.

El Salvador has a population of about 6.4 million, with more than 2 million citizens living abroad and transferring more than $4 billion each year. Banks charge a commission for such transfers, they can take days, and sometimes residents have to come in person.

According to Bukele, the transition to Bitcoin «will improve the lives and future of millions of people». The President gave no further details on how the cryptocurrency would be integrated into the country’s financial system.

Estonia is a country where cryptocurrency is legalized at the state level, and it is possible to obtain a cryptocurrency license.