Friday, September 17, 2021

El Salvador officially adopts bitcoin as a legal tender.

The Takeaway:

El Salvador has officially become the first country in the world to accept Bitcoin as a legal tender after the digital currency was officially adopted on Tuesday.

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El Salvador has officially become the first country in the world to accept Bitcoin as an optional legal tender after the digital currency was officially adopted on Tuesday, 7 September 2021. Now businesses in the South American country can accept the controversial cryptocurrency as payment. The move stems from June this year when El Salvador approved President Nayib Bukele’s proposal to embrace cryptocurrency.

 

Other developing nations are closely watching El Salvador.

Populist President Bukele is regarded as a controversial figure, and his administration and officials have previously faced accusations of alleged corruption and graft. In May, for example, the United States reportedly named five of Bukele’s ministers and aides as being corrupt and diverted foreign aid funds away from the country’s government institutions instead of to local civil society groups. However, President Bukele championed Bitcoin adoption as a way to help low-income countries like El Salvador move from a large cash economy to a digital economy, where a person’s bank account is essentially their smartphone. And roughly 70% of people in El Salvador do not have bank accounts or credit cards. 

 

Global financial regulators did not approve of El Salvador’s move into bitcoin. 

The move surprised many, and the World Bank (the international lender to developing nations) refused to help implement it as legal tender due to concerns over transparency and the environmental impact of Bitcoin mining. Rating agency Fitch also warned of greater risks for banks due to the El Salvador law. It said the move could open floodgates to money laundering, increase banks’ exposure to regulatory risks. And central banks and financial regulators have repeatedly warned of bitcoin’s notorious volatility and said buyers should be prepared to lose all their money.

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Disclaimer: The article reflects the opinions of the author and is not representative of Chaintimes’ views.
The article does not offer any investment advice. User discretion is advised when investing in or trading with cryptocurrency. Extensive and diligent research should be carried out by the reader before making a decision.

Jai Pratap
Jai Pratap
A Mass Media Graduate who loves to write. Jai is also a sports enthusiast and a big movie buff. He loves to learn new things.

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