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El Salvador, BTC, Legal Tender, First Adopter


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Cryptopendence Day

Published:

Jun 12, 2021


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Posted In:

El Salvador, BTC, Legal Tender, First Adopter

Published:

Jun 12, 2021


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Is June 9th Cryptopendence Day? For the first time, Bitcoin has become a country’s legal tender, announced by backward-hat-wearing millennial Salvadorian President Nayib Bukele.

Legal tender means that Bitcoin, along with the US dollar - the official currency since 2001 - now “must” be accepted as a form of payment for goods and services across the country. This law will be going into effect in 86 days, at a Bitcoin/dollar exchange rate set by the market. Panama and Paraguay are in discussions to follow suit.

The volatility of Bitcoin brings El Salvador’s decision into question, but this event is a considerable step for both Bitcoin and other cryptocurrencies, proving increasing legitimacy. Bitcoin rose about 17% the day following El Salvador’s decision, which highlights its volatility and single-event fluctuations.

70% of El Salvador’s population lack access to basic financial services, and the economy relies heavily on remittances (representing 23% of GDP). Proponents argue that the upside case for access trumps the uncertainty.

To support such widespread use of Bitcoin, Bukele suggested using geothermal energy to develop Bitcoin mining facilities from the country’s volcanoes, emulating Iceland’s Bitcoin mining industry, which accounts for 8% of all Bitcoin mining in the world.

Whether or not this trend gets adopted by other governments, it surely will continue to be energy-intensive, both in mining and memes.

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