MasterOfCoin
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El Salvador's President Nayib Bukele says he will make the Bitcoin crypto-currency legal tender in the country.
If his plan is backed by the nation's congress, the Central American country would be first in the world to formally adopt the digital currency.
It would be recognized and used alongside the US dollar, El Salvador's official currency.
One cannot understate how earth-shatteringly significant this would be.
The Federal Reserve (which isn't federal and has no reserves) will not be at all happy at the prospect of a rival currency, over which it has zero control and is powerless to prevent transactions in, holding equal legal status as a means of payment under law with the US dollar.
It's a very brave and bold move, considering the fate generally visited upon any sovereign nation in recent times that has dared to challenge the supremacy of the dollar and adopt alternatives. It most certainly risks the country being reduced to rubble and smouldering ruins if the inevitable attempts at regime change, sponsored coups or scathing economic sanctions fail to restore the status quo.
However, some rather significant facts suggest that the usual tactics may be easier imagined than carried out.
Some 70% of Salvadoran's do not have a bank account or access to financial services. So the change will, overnight, empower the vast majority of the population with the opportunity to become actively economically engaged and transact business with ease. That's over 10 million people that are currently financially excluded. The impact will be significant, to say the least.
More than two million Salvadorans live outside the country, but they continue to keep close ties to their place of birth, and El Salvador's economy relies heavily on their remittances, or money sent home from abroad, with them sending back more than $4bn (£2.9bn) each year, which makes up around 20% of the country's gross domestic product (GDP).
Banking and associated money transfer services can charge very large fees for such transfers, which are inaccessable to the poorer and financially excluded and can also often take many days to arrive and sometimes even need to be picked up in person. Bitcoin will allow and enable them to do the same thing, only almost instantaneously, and direct to the recipient, for near zero fees. A massive improvement.
"This will improve lives and the future of millions," Mr Bukele said.
Free the world- use cryptocurrency.
🌍
If his plan is backed by the nation's congress, the Central American country would be first in the world to formally adopt the digital currency.
It would be recognized and used alongside the US dollar, El Salvador's official currency.
One cannot understate how earth-shatteringly significant this would be.
The Federal Reserve (which isn't federal and has no reserves) will not be at all happy at the prospect of a rival currency, over which it has zero control and is powerless to prevent transactions in, holding equal legal status as a means of payment under law with the US dollar.
It's a very brave and bold move, considering the fate generally visited upon any sovereign nation in recent times that has dared to challenge the supremacy of the dollar and adopt alternatives. It most certainly risks the country being reduced to rubble and smouldering ruins if the inevitable attempts at regime change, sponsored coups or scathing economic sanctions fail to restore the status quo.
However, some rather significant facts suggest that the usual tactics may be easier imagined than carried out.
Some 70% of Salvadoran's do not have a bank account or access to financial services. So the change will, overnight, empower the vast majority of the population with the opportunity to become actively economically engaged and transact business with ease. That's over 10 million people that are currently financially excluded. The impact will be significant, to say the least.
More than two million Salvadorans live outside the country, but they continue to keep close ties to their place of birth, and El Salvador's economy relies heavily on their remittances, or money sent home from abroad, with them sending back more than $4bn (£2.9bn) each year, which makes up around 20% of the country's gross domestic product (GDP).
Banking and associated money transfer services can charge very large fees for such transfers, which are inaccessable to the poorer and financially excluded and can also often take many days to arrive and sometimes even need to be picked up in person. Bitcoin will allow and enable them to do the same thing, only almost instantaneously, and direct to the recipient, for near zero fees. A massive improvement.
"This will improve lives and the future of millions," Mr Bukele said.
Free the world- use cryptocurrency.
🌍
