At the recent Bitcoin 2021 convention in Miami, the president of El Salvador, Nayib Bukele, announced that El Salvador will be the first ever country to accept Bitcoin as legal tender.
This news is incredible as many investors fear regulations from nations will be what causes a major price drop.
At the conference, Jack Mallers, who is CEO of the Zap, got emotional when announcing the partnership with El Salvador. Mallers has done business in El Salvador and is planning to build the company’s headquarters in the Central American haven later this year.
On June 6th, Bukele outlined on Twitter some of the selling points of El Salvador for crypto investors. The bill was officially passed on June 8th.
As president Bukele uses this opportunity to also sell investors on the beauty of El Salvador and the great weather, some other countries have followed suit.
One of the main reasons why El Salvador is implementing Bitcoin as legal tender is due to their reliance on the U.S. dollar, and the cash economy they have. 70% of the country’s residents do not have a bank account, however, the majority of the country has access to a smartphone which is what makes Bitcoin and other cryptocurrencies such a big opportunity.
Like many Americans, Bukele fears the depreciation of the U.S. dollar as the central banks continue to print money. Inflation is on the rise meaning that the precious and beloved U.S dollar is slowly going to become less relevant. An international currency such as Bitcoin could be a major factor when it comes to fighting inflation and gaining independence from central banks.
Although not formalized, there is a lot of speculation through various laser eyed Twitter pictures that other Latin American countries are going to follow El Salvador’s lead. Carlos Rejala, a lawmaker in Paraguay, was the second politician to hint at a Bitcoin announcement. Rejala has implied that a Bitcoin announcement for Paraguay is in the works.
After Paraguay jumped on the Bitcoin phenomenon, as expected, many other countries followed close behind. In just a few days, politicians and various presidents from Ecuador, Mexico, Panama, Argentina, Brazil, and Colombia have added laser eyes to their Twitter pictures.
The bullish news does not stop at Bitcoin becoming an official currency in El Salvador. Following the Elon Musk outcry for Bitcoin to be more sustainable, president Bukele also announced plans to make mining more sustainable by using 100% renewable energy from volcanoes.
This news completely crushes the argument of Bitcoin being an energy consuming threat to the planet. This kind of news was crucial to bringing the price up after Elon Musk criticized Bitcoin publicly dropping the price a whopping 50%. Following the volcano announcement and the official passing of the bill, the price rose 19% in a single day on June 9th.
Check out this tweet to see a full list of politicians who have pledged allegiance to crypto so far. While you’re there, check out @cryptospaceUS and let us know which country you think may be next!
This news is extremely bullish for a struggling market right now. As Central and South American countries add Bitcoin as legal tender, it is projected that other countries will be close behind. With the removal of capital gains tax and the legality of crypto, if other countries don’t soon adapt, investors will just take their money to the crypto friendly nations.
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