El Salvador Becomes First Nation to Adopt Bitcoin as Legal Tender
El Salvador's Congress approves a law making bitcoin official legal tender alongside the US dollar. The government guarantees convertibility and mandates businesses to accept the cryptocurrency for transactions.
El Salvador makes history as the first country in the world to adopt bitcoin as legal tender after Congress approves President Nayib Bukele's proposal. Lawmakers pass the measure with 62 out of 84 possible votes, allowing the cryptocurrency to officially stand alongside the US dollar as a recognized national currency.
Under the new law, businesses must accept bitcoin as payment for goods and services, and citizens can use it to pay taxes. The government creates a trust at the country's development bank to guarantee instant convertibility to dollars at the time of transaction, making the use of the digital currency optional and risk-free for individuals. The bitcoin-dollar exchange rate sets by the market, and the law takes effect in 90 days.
President Bukele promotes the move as a way to increase financial inclusion, attract investment, and simplify remittances from Salvadorans living abroad. However, analysts warn that this decision complicates ongoing negotiations with the International Monetary Fund for a billion-dollar program, leaving it uncertain whether other nations will follow this historic financial shift.