Atlanta, Georgia 2021-06-09 07:52:05 –
El Salvador became the first country to adopt Bitcoin as legal tender.
The majority of lawmakers approved the proposal from. President Salvador Nayib Bukele will allow Bitcoin to be used as fiat currency domestically alongside the US dollar.
The law states that “all economic agents accept Bitcoin as a form of payment when a purchaser of goods or services offers Bitcoin.” It also states that tax payments can now be made with Bitcoin.
Bukele, 39, is a right-wing populist who came to power in 2019.He previously stated that El Salvador will partner with digital financial firm Strike to establish the infrastructure needed to support the use of Bitcoin as the official currency.
Giving a currency the status of fiat currency usually means that the currency can be used by: Borrower to repay debtNot all people and businesses do so automatically. Required to accept currency as payment For goods or services.
In a pre-voting tweet, Bukere said using Bitcoin as fiat currency would facilitate financial inclusion, tourism, innovation and economic development. El Salvador, the smallest country in Central America, quickly contained the coronavirus pandemic, but its economy was hit hard last year. According to the World Bank.
The future of digital currencies
Central banks around the world have shown a fascinating reaction to Bitcoin, but have hesitated to accept cryptocurrencies. Extreme volatilityFor example, Bitcoin plunged to a record high of over $ 60,000 and then fell to more than half its value earlier this year.Other, less traded cryptocurrencies are even more volatile and trade up and down like seesaws — often based on speculation and meme tweets by Tesla CEO Elon Musk.
However, the growing popularity of cryptocurrencies has led the Federal Reserve Board (FRB) to look at the limits of the old-fashioned dollar. Bitcoin trading takes place almost instantly.
Cryptocurrencies also do not require a bank account. Instead, it is stored in your digital wallet. This will allow people in poorer communities, such as the minority community in the United States, to gain access to finances, as well as many in El Salvador.
Federal Reserve Board member Lael Brainard created a more efficient payment system last month, allowing financial services to be extended to Americans who are underserved by traditional banks. Here is a summary of examples of digital currencies supported by the Central Bank. ..
Federal Reserve Board of Governors (FRB) Chairman Jerome Powell announced in May that the central bank will publish a paper this summer outlining the board’s views on the benefits and risks associated with the digital US dollar.
Cryptocurrencies like Bitcoin are digital, but central bank digital currencies are fundamentally different from today’s cryptocurrencies because they are managed by the central bank rather than the decentralized computer network.
— Stefano Pozzebon, George Engels, Allison Morrow contributed to this report
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