It’s authentic: El Salvador is the world’s first country to accept Bitcoin as legitimate money.
The government approved the required law in June, and it entered into force Monday, with President Nayib Bukele hailing the occasion as historic.
In reality, the new regulation implies that Bitcoin is now comparable to El Salvador’s official fiat currency, the US dollar, and Salvadorans may use Bitcoin to make cash payments legally. Furthermore, companies operating in the nation will be required to begin taking Bitcoin payments if they have the necessary equipment.
Bukele also declared (through Twitter) that the nation had acquired 400 bitcoins totaling $20.3 million at the time of writing.
El Salvador’s decision to embrace Bitcoin is noteworthy for a number of reasons. Apart from providing Bitcoin more validity as a worldwide currency, it may enable Salvadorans living overseas to send remittances at a reduced cost (Bitcoin transfers typically cost several dollars, regardless of the amount transferred). Bitcoin’s fluctuation, on the other hand, may pose issues for consumers. Bitcoin’s cost has increased and dropped dramatically on repeated occasions, frequently within hours.
El Salvador’s decision to purchase bitcoins is also noteworthy. As the government adds more bitcoins to its treasury, its fate becomes progressively connected to the price of Bitcoin, which is known to increase and fall dramatically in very short periods of time. The government is already experiencing the consequences of its choice, having had its credit rating lowered by rating agency Moody’s following the passage of the Bitcoin law.
Bitcoin’s price has risen dramatically in the previous 48 hours, from approximately $50,600 to $52,900 per coin, but has then dropped back to around $50,800.
