The crypto world has been abuzz lately after El Salvador President Nayib Bukele at the Bitcoin conference held in Wynwood, Florida, on 5th June announced his plan for the country to adopt Bitcoin as a legal tender in El Salvador. The country adopted the dollar as its legal tender in 2001 and has been using it ever since, until now. The forward-looking President announced his plans for Bitcoin to be used alongside the US dollar, making it the first country to officially use Bitcoin as a legal currency.
There have been a lot of speculations about what this means for the country, and most importantly, what this means for the cryptocurrency which has been at the forefront of discussions of mass adoption as a legal way for paying for goods and services. How will people use it? Is it feasible? What about the fees? These are all questions that have been at the front of people’s minds since this announcement.
A good response to these questions is the fact that the plan is not to make Bitcoin the only way to pay for things, the country still uses the US dollar. But it opens the citizens and people who carry out business internationally to a whole new world of possibilities. It will mean faster payments for goods and services. Long delays with banks processing payments or other payment platforms will be completely bypassed, making the whole process smoother. This was a hard hitting point in his proposal for Bitcoin adoption and has gained a lot of support for this.
There is also the fact of wanting to use Bitcoin as a reserve as opposed to the US dollar. When I heard this, one thing stood out to me; this is how countries become rich. Time and time again, this has repeated itself in history. A country realizes that a resource will be in high demand in the future, hoards it, and by the time other countries realize how valuable this resource is, that country already has such a large share that they become extremely wealth due to having a monopoly on that resource. And if history is anything to go by, El Salvador might just be heading down the path to becoming one of richest countries in the world in the near future.
With all this said, this proposed bill is just in its early stages and will take a while to hash out the details of making it a legal tender but it is great strides in the adoption of Bitcoin and cryptocurrencies in general. Rome was not built in a day and the adoption of Bitcoin will not be achieved in a day. But it will happen and when it does, you want to be on the winning side.