El Salvador becomes the first country that accepts Bitcoin as legal tender, President Nayib Bukele tweeted on June 9 that a bill was passed by the absolute majority to recognize Bitcoin as the legal currency for the country, this was not shocking because El Salvador experiencing hyperinflation, deep into the high debt, higher poverty, and extreme unemployment. El Salvador is a Central American country with a land of 20,000 square kilometers, the total population of the country is 6.7 million.
The population of El Salvador has a mixed number of races, the multi-ethnic, multi-lingual, and multi-faith country, the country coupled with a corrupt political mafia, and sluggish domestic situation, many people feed their families by breaking the law and committing crimes. The country is facing many criminal gangs, since 2015 there were many paid killings incidents caused by the street gangs even after the vigorous crackdown.
The economy of El Salvador dominated by agriculture and has a rear industrial base, the current epidemic has contributed to the ongoing financial crisis, the country’s economy is fragile and vulnerable. In recent years, affected by the international economic and financial crisis, the economic growth of the country has been very slow.
The current president of the country participated in the election on February 3, 2019, on behalf of the National Unity League, and elected with more than 53% of the vote, after taking office he fired the Attorney General and five other corrupt magistrates, in order to reduce the corruption the Salvadoran Congress passed education and infrastructure financing plan, according to Buckley’s view the state has to create the necessary conditions, safety and security to promote and protect private enterprises and provide its citizens better quality life.
The El Salvador official currency is colon but it almost abandoned, the country is devastated by hyperinflation, the monetary system is evaporated therefore on December 22, 2000, the U.S. dollar adopted as the legal currency.
According to the Bitcoin act the treatment of Bitcoin not restricted in any transaction between private, public, or legal persons. The exchange rate depends on the free market prices can only be denominated in Bitcoin, government tax can also be paid in Bitcoin and will not subject to capital gains tax, every business or person accept the payment in Bitcoin, the government provides the knowledge and training to use Bitcoin as the currency.
El Salvador is a cash-based economy and still 70% of the population not even have a bank account, after agriculture the economy depends on overseas remittances equivalent to approximately 22% of the country’s GDP, according to data the in 2020 the total international remittances reached a peak of 5.9 billion US dollars when USD transferred internationally the 10% fees deduced, it also causes the loss of money, therefore Bitcoin adopts as the legal currency.
After all, the country is still in confusion and chaos because of the various uncertainties in the prospects of usage of Bitcoin like if the network is in a state of congestion or the ability of blockchain to service every holder, the upper limit and transaction costs, in Bitcoin Miami conference Buclay announced the establishment of the country’s financial infrastructure with the help of Lightning Network payment platform Strike, however, El Salvador belongs to third world country his political career and the Bitcoin journey in the country are closely linked together.
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Source: https://medium.com/cryptocurrencies-ups-and-down/el-salvador-and-bitcoin-use-case-for-crypto-world-b965050a0bd8?source=rss——-8—————–cryptocurrency
