Bitcoin is all set to become the legal tender in El Salvador, starting from September. It must be noted that the use of bitcoin will be optional. Earlier this month, El Salvador made history by adopting popular cryptocurrency as legal tender.
Explaining how people in El Salvador will use the cryptocurrency, President Nayib Bukele said, “The use of bitcoin will be optional, nobody will receive bitcoin if they don’t want it… If someone receives a payment in bitcoin they can choose to automatically receive it in dollars."
Salaries and pensions will continue to be paid in US dollars, said Bukele, without specifying if that included salaries paid to state workers and private sector employees.
While speaking in an interview, El Salvador’s millennial president said, “I’m pretty sure this is going to work, not only for us but for humanity, because it is a leap forward for humanity." He further added the move would boost jobs and economic development to the Central America country.
He further mentioned that this new regulation would lessen El Salvador’s reliance on the US dollar, the existing legal tender. “(We will be) at least becoming a little less dependent on the output of new dollars, and the new inflation that’s coming with those all those new dollars," he said.
There was no plan to hold bitcoin in national reserves, though that might happen “probably in the future", he said.
On Thursday, Athena Bitcoin said it plans to invest over $1 million to install some 1,500 cryptocurrency ATMs in El Salvador, especially where residents receive remittances from abroad. The ATMs can be used to buy bitcoins or sell them for cash, it added.
Bukele also said he had received a lot of interest from parties over exploiting renewable energy from the country’s volcanoes to build a bitcoin mining hub. “We have discovered new (geothermal) wells that will give us 95 megawatts, which is not huge but still quite considerable," he added. A bitcoin mining plant would be built at a cost of $480 million, he said, while bitcoin would pay for infrastructure from schools to bridges.
Paraguay has become the second country after El Salvador to propose a bill to make Bitcoin legal tender. If the bill is passed, it will make Paraguay the second country to make Bitcoin its official currency.