El Salvador is the world's first country to adopt Bitcoin (CRYPTO: BTC) as legal tender. The nation's congress passed a bill allowing Bitcoin to be used as currency late yesterday afternoon.
In typical fashion, El Salvador's President Nayib Bukele made the announcement on Twitter Inc (NYSE:TWTR). He tweeted 62 out of 84 congress members voted in favour of making the cryptocurrency legal tender.
The news comes only days after President Bukele stated he would introduce the bill, which he believes will increase Salvadorans' financial freedoms.
President Bukele tweeted he'd sent the 3-page bill to congress 4 hours before he tweeted it had passed. It will take effect in 90 days' time.
El Salvador will allow its population to convert the cryptocurrency to US dollars through a trust created at its development bank BANDESAL.
Additionally, the country intends to give its less crypto-literate citizens "necessary training and mechanisms" to use Bitcoin in everyday transactions.
In another tweet, President Bukele said he wanted state-owned geothermal energy company LaGeo to source electricity from El Salvador's volcanos to put towards Bitcoin mining. It's hoped Bitcoin mining in the country will eventually be powered by 100% renewable energy.
President Bukele has also offered immediate permanent residence in El Salvador for "crypto entrepreneurs".
Additionally, he highlighted that profits made from trading Bitcoin inside El Salvador won't be subject to capital gains tax.
Cryptocurrency for equality
According to President Bukele, using Bitcoin as tender would grant Salvadorans more financial equality.
He said 70% of El Salvador's population did not have bank accounts. Many Salvadorans rely on remittances sent from family living abroad, which often attract hefty transfer fees.
By using cryptocurrency for transfers, the country's population could effectively sidestep fees to receive billions of dollars more in remittances each year.
Additionally, Bitcoin can be transferred outside of traditional financial institutions. This could make it a more accessible currency for Salvadorans than US dollars.
However, the US dollar will remain El Salvador's official currency.
About the price of Bitcoin
Since President Bukele tweeted El Salvador has officially adopted Bitcoin as legal tender, the Bitcoin price has gained 13.9%.
Currently, Bitcoin is currently swapping hands for $48,087.58 per coin.
