El Salvador’s president, Nayib Bukele, has announced, via video at the Bitcoin Miami conference yesterday evening, that El Salvador will be adopting Bitcoin as “legal tender”! [Reuters]
El Salvador has used the US dollar as its currency since 2001. What’s happening here appears to be: El Salvador says “take that!” to the US by bringing in a proprietary payment network, which claims to be denominated in BTC rather than US dollars.
I wrote a couple of days ago about how this sort of thing worked out for the Marshall Islands. I expect that various institutions will shortly be phoning El Salvador, and asking if they really want to be cut off from the world financial system absolutely and utterly. Given that $2 out of every $10 coming into El Salvador comes from remittances [WSJ], I’d hope they don’t.
#Bitcoin has a market cap of $680 billion dollars. 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.