El Salvador plans bill to adopt bitcoin as legal tender

Crypto assistance: Bukele says bitcoin can help boost the economy and generate jobs.

SAN SALVADOR: El Salvador’s Nayib Bukele, Latin America’s youngest president who’s known to break from the norms, says he plans to send legislation that would make bitcoin legal tender in the country.

“In the short-term, this will generate jobs and help provide financial inclusion to thousands outside the formal economy, ” Bukele said in a video broadcast at the bitcoin 2021 conference in Miami. He said he would submit the legislature a bill next week.

In a series of tweets, the 39-year-old leader said bitcoin could help boost the economy. El Salvador’s low banking penetration rate – 70% of the population doesn’t have a bank account – could also improve with the use of Bitcoin, he said, adding that it would facilitate faster transfers for US$6bil (RM24.77bil) of remittances a year.

“Financial inclusion is not only a moral imperative, but also a way to grow the country’s economy, providing access to credit, savings, investment and secure transactions, ” he said.

“We hope that this decision will be just the beginning in providing a space where some of the leading innovators can reimagine the future of finance.”

El Salvador’s bonds tumbled last month after Bukele’s party used the supermajority it won in February congressional elections to fire five top judges and the attorney general, drawing condemnation for what critics saw as a blatant power grab.

Wall Street reacted swiftly, with Oppenheimer & Co, Amherst Pierpont Securities and Allianz SE among half-a-dozen firms that sold the notes or told clients to pare their holdings.

The move also fuelled concern that the United States will urge the International Monetary Fund to closely review a much-needed loan for El Salvador, potentially upending government finances.

Bukele is among the region’s most popular leaders, according to public-opinion polls that show him with an approval rating of more than 85%.

He has a strong social media following and charted an unconventional route to politics, working at his father’s marketing agency before serving terms as mayor of San Salvador and a suburb.

He ran for president in 2018 pledging to curb corruption and rampant gang-fuelled crime, and became the first president in almost 30 years to win without the support of one of the major parties. — Bloomberg

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