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El Salvador has become the first country in the world to officially classify Bitcoin as legal tender.
Congress approved President Nayib Bukele's proposal to embrace the cryptocurrency, with 62 out of 84 possible votes on June 6th, 2021.
In an interview with the BBC, our Tracy Angulo explains that that bitcoin "caters to the unbanked. About 70% of El Salvadorians do not have traditional bank accounts or credit cards so this could be an opportunity for them to experience the global economy."
Tracy also explains that cryptocurrency is a decentralized digital asset that gives people access to the global economy. It is transparent and easy to use. Crypto, is also a "volatile currency. It is a digital asset unlike your legal tender that you can touch and feel. There are security concerns about the volatility itself." Bitcoin fluctuates on a day to day basis.
The new law means businesses in El Salvador must accept Bitcoin as legal tender for goods or services, unless it is unable to provide the technology needed to do the transaction.
Other countries with similar socio-economic situations are currently using bitcoins and other cryptocurrencies see digital currencies as a viable options.
Guidehouse is a global consultancy providing advisory, digital, and managed services to the commercial and public sectors. Purpose-built to serve the national security, financial services, healthcare, energy, and infrastructure industries, the firm collaborates with leaders to outwit complexity and achieve transformational changes that meaningfully shape the future.