SAN SALVADOR (BLOOMBERG) – Nayib Bukele of El Salvador, Latin America’s youngest president known to break standards, has said he plans to send legislation that would make Bitcoin legal tender in the country, to sides of the US dollar.
“In the short term, this will generate jobs and help provide financial inclusion to thousands of people outside the formal economy,” the 39-year-old leader said in a video released at the Bitcoin 2021 conference in Miami on Saturday. June 5. He said he would submit a bill to the legislature this week.
El Salvador is a largely cash economy, where 70 percent of the population does not have a bank account. The money sent home by migrants represents more than 20 percent of its gross domestic product.
The services in place may charge a 10% or more fee for these international transfers, which can sometimes take days to arrive and sometimes require physical pickup, CNN reported.
In a series of tweets, Mr Bukele said Bitcoin could help boost the economy. El Salvador’s low bank penetration rate could also improve with the use of Bitcoin, he said, adding that it would facilitate faster transfers for $ 6 billion (S $ 7.95 billion ) remittances per year.
âFinancial inclusion is not only a moral imperative, but also a way to develop the country’s economy, by providing access to credit, savings, investment and secure transactions,â he said. -he declares. âWe hope this move is just the start to provide a space where some of the top innovators can reimagine the future of finance. “
Bitcoin, meanwhile, continued its decline on Saturday after El Salvador’s potentially positive catalyst failed to allay investor concerns over Chinese regulatory risks.
The world’s largest digital coin slipped to trade around US $ 35,220 at 6:31 p.m. in New York City, down 5.3% in the past 24 hours. The move extends its downtrend for a second day after a cryptic tweet from Tesla founder and crypto advocate Elon Musk hinting at a potential break with the token.
Weibo, a Chinese social media service, appears to have blocked some crypto influencer accounts on Saturday, citing a violation of unspecified laws and Weibo community rules. While Weibo has cracked down on various cryptocurrency-related accounts in recent years, the news has added to recent harsh Chinese regulatory rhetoric that has already caused the prices of many digital coins to drop.
The founder and CEO of the Strike payments platform, Jack Mallers, presented Mr Bukele’s video at Saturday’s meeting, saying it would diminish as the âhit heardâ around the world for Bitcoin. âHe said the Salvadoran government asked him to help develop a plan for the use of Bitcoin.
âWhat is transformative here is that Bitcoin is both the largest reserve asset ever created and a superior monetary network. Holding Bitcoin offers a way to protect developing economies from potential fiat currency inflation shocks, âhe said.
El Salvador’s bonds fell last month after Mr Bukele’s party used the qualified majority it won in the February parliamentary elections to fire five top judges and the attorney general, condemning what critics saw it as a blatant takeover.
The move also fueled concerns that the United States would urge the International Monetary Fund to take a hard look at a much-needed loan El Salvador, which could wreak havoc on public finances.
Mr Bukele is one of the region’s most popular leaders, according to opinion polls showing him with an approval rating of over 85%. He has a strong social media following and has charted an unconventional path in politics, working in his father’s marketing agency before serving as mayor of San Salvador and a suburb. He ran for president in 2018, pledging to fight corruption and rampant gang-fueled crime, and became the first president in nearly 30 years to win without the support of one of the main gone.