Published: 14th Jun, 2021
El Salvador is declaring the Bitcoin cryptocurrency as a legal tender in the Central American country.
Context
El Salvador is declaring the Bitcoin cryptocurrency as a legal tender in the Central American country.
- If that happens, El Salvador would become the first country in the world to formally adopt the virtual currency.
About
About the adoption of Bitcoinby El Salvador
- It depends heavily on remittances sent by Salvadorians from abroad.
- Around a quarter of the country’s citizens live in the US, and in 2020 they sent home more than $6 billion in remittances i.e. more than 20% of the GDP.
- A big chunk of those 6 billion dollars is lost to intermediaries. By using Bitcoin, the amount received by more than a million low income families will increase in the equivalent of billions of dollars every year.
- Also, Bitcoin will help increase financial inclusion in El Salvador, where 70% of the population does not have a bank account and relies on the informal economy.
Attitude of governments towards cryptocurrencies
- Governments around the world are now looking to launch their own virtual tokens, called central bank digital currencies (CBDCs).
- US has taken a decisive step towards issuing its own CBDC.
- In India too, the government has floated The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021.
- It will prohibit all private cryptocurrencies and lay down the regulatory framework for the launch of an “official digital currency”.
|
About CBDC
|
Courses
Study
Notes
Home
Resources
More
