- El Salvador, a Latin American country, made a historic decision in the early hours of Wednesday by accepting Bitcoin as a Legal tender
- The bill was passed with the majority paving the way to create a parallel financial structure for the unbanked
- After El Salvador’s historic decision, many other nations are expected to follow a similar path and regulate Bitcoin at the earliest.
In a historic move, El Salvador’s parliament passed the bill related to Bitcoin and gave it an equal status as a legal currency. President Nayib Bukele officially recognizes the asset, quoting that “freedom is not a bad thing.”
As many as 62 members out of 84 legislators voted in favor of the bill and opened the doors for financial services. The bill does allow bitcoin for goods and services where-in the government will act as the backbone for the people who do not want to take the risk.
The Bill also offers cryptocurrency entrepreneurs a permanent residency in the country. In A nation where more than 70% of people are unbanked, Bitcoin may improve the economy by generating more jobs with wider and easier accessibility.
The more interesting feature of the bill is if, in an instance, a merchant prefers fiat currency over BTC, then the government would buy Bitcoin at a fixed rate and sell it at the same time. Moreover, the people have the freedom to use any wallets and are not restricted to use only government-backed wallets.
The Significance of This Move
Bitcoin or cryptocurrency is more surrounded by skeptical clouds as many nations hesitate to adopt the new way of buying and selling. Maybe it directly challenges the government-backed and controlled fiat currency or they fear that their citizens will be impacted by the volatility.
However, since 2020, the situation has changed drastically. Bitcoin started to become a center of attraction globally. With worldwide recognition and mass adoption, many countries looked at this technology from a wider angle. Many countries have already regulated cryptocurrencies and classified them under assets. Moreover, countries like India, where the regulations were very misty, after the El Salvador move, also cleared the possibilities of the ban. The country will consider cryptocurrencies as assets and regulate accordingly.
Bitcoin Price Propelled High
Bitcoin price recently experienced a drastic fall from its highs due to many external factors like negative comments from Elon Musk, change in U.S tax laws, and China banning bitcoin mining. However, the historic bills gave a major boost to the BTC price that broke through the downtrend. As per the popular on-chain analytic platform Santiment, more than 1.5 million bitcoin returned to an unrealized profit.
The price also rebounded from above $37,000 in a very short period of time. Moreover, the bitcoin mining in the country would be carried out with renewable resources using the energy from the volcanos. Therefore making the mining more friendly to the environment.