El Salvador is partnering with the digital wallet firm Strike to create the necessary infrastructure to make Bitcoin (CRYPTO: $BTC) a legal tender in the country.
What Happened: El Salvador president Nayib Bukele said he would introduce legislation in the country that will recognize Bitcoin as legal tender, the same way as the U.S. dollar, AP reports.
Speaking at the Bitcoin conference in Miami on Saturday in a recorded message, Bukele said that he would send a legislative proposal to the country's congress next week to make the cryptocurrency legal tender in the Central American nation.
In a Twitter thread, Bukele continued saying, "Bitcoin has a market cap of $680 billion. If 1% of it is invested in El Salvador, that will increase our GDP by 25%," he said.
"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."
Bukele said that 70% of El Salvador's population does not have a bank account and works in the informal economy. Bitcoin could improve financial inclusion.
Talking about Bukele's announcement, Strike's CEO and founder Jack Mallers said "this will go down as the shot heard 'round the world for Bitcoin'."
Why It Matters: Bukele's party has a strong position in the new congress and it should be easy for him to get approval for the new legislation regarding Bitcoin legalization.
According to CNBC, El Salvador has assembled a team of Bitcoin leaders to help build a new financial ecosystem with Bitcoin as the base layer.
Recently, Bukele's New Ideas party swept the El Salvador elections. The new assembly soon came under fire after it ousted the attorney general and top judges.
After this incident, the U.S. Agency for International Development pulled aid from El Salvador's national police and a public information institute instead of re-routing funds to civil society groups.
Last month, the White House Special Envoy for the Northern Triangle Ricardo Zúñiga said that the U.S. government would like to see El Salvador reverse the moves against the court and the attorney general during a visit to El Salvador. Bukele said that would not happen.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Visit Benzinga's Crypto Homepage - 1,000,000+ depend on Benzinga Crypto every month