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el Salvador Bitcoin Legal Tender
El Salvador became the first country in the world to make Bitcoin legal tender in September 2021.
This means that all businesses in the country are required to accept Bitcoin as a form of payment. The government also gave citizens financial incentives to download a special cryptocurrency app, including $30 in free Bitcoin with each download, which is nearly 1 percent of average annual per capita income, and large discounts on goods and services.
The move was intended to popularize and regularize the use of Bitcoin, and President Nayib Bukele suggested that legalizing Bitcoin would spur investment in the country and help the roughly 70% of Salvadorans who don’t have access to “traditional financial services”.
El Salvador has since approved a law that would regulate the issuance of other digital assets by both the state and private entities, with the aim of attracting national and foreign investors while creating new financing opportunities for citizens, companies, and the government.
The law establishes a legal framework for all digital assets that are not legal tender, such as Non-Fungible Tokens, and does not apply to digital assets that by law are legal tender, such as Bitcoin.
The move to make Bitcoin legal tender in El Salvador has been met with mixed reactions. While some see it as a bold move that could help the country’s economy, others have expressed concerns about the volatility of Bitcoin and its potential impact on the country’s financial stability.
Despite these concerns, El Salvador continues to move forward with its experiment with Bitcoin as legal tender.