In a world first, El Salvador has become the first country to adopt bitcoin as legal tender. Lawmakers passed a bill in early June to allow digital currency to be used in everyday life, with 62 out of 84 voters approving the bill proposed just last week.
Bitcoin can now be used to purchase property, pay tax, or buy goods and may only be refused if the business cannot provide the technology required to complete the transaction.
BTC Alongside USD
The cryptocurrency will become legal tender in 90 days, alongside the US dollar.
President Nayib Bukele declared the new law a historical moment for his country and said that it would make it easier for Salvadorans to send money from abroad.
The bill passed thanks to allies of the 39-year-old leader, despite some opposition criticizing the speed of the vote.
Remittances make up a large portion of El Salvador’s economy, totaling billions of dollars every year, which is equivalent to roughly 20% of GDP (gross domestic product).
President Bukele has praised bitcoin as “the fastest-growing way to transfer” these remittances.
Over two million Salvadorans currently live overseas, sending back more than $4bn (£2.8bn) each year to their home country. Bukele also claimed that the new legal tender will improve access to financial services for the 70% of Salvadorans who have no bank accounts.
Bitcoin prices slumped to $30,000 earlier on Tuesday, which is the first time since January that the digital currency had fallen so low.