Bitcoin Now Legal Tender in El Salvador, Marking World First

Bitcoin Now Legal Tender in El Salvador, Marking World First

Zelaya's comments contradicted article 7 of the Bitcoin Law passed in June, which stipulated that bitcoin must be accepted as a form of payment by "every economic agent." Zelaya was asked if it was necessary to remove that article and didn't elaborate further to fahrenheit system pro.

El Salvador's Central Bank did not clarify matters on Tuesday in a consultative draft with technical standards to facilitate the application of the Bitcoin Law. According to the draft, banks, cooperative banks, savings and credit societies that are "interested in providing the service for convertibility of dollars or bitcoins and vice versa" will be the ones required to follow these standards.

In another document, entitled "Guidelines for the Authorization of the Operation of the Digital Wallet Platform for Bitcoin and Dollars," the Central Bank of El Salvador stipulates that wallets will need to implement know-your-customer policies.

Clients for the digital wallet can be individuals or legal entities that are resident in the country, and who comply with the requirements of know your client and prevention of money laundering, financing terrorism, and proliferation of arms of mass destruction, the document said. It also stated that these requirements would be established according to the technical norms set by the Central Bank and international treaties and conventions in this area.

Three months after the adoption of the Bitcoin Law by El Salvador's legislature, Bitcoin is now legally recognized as a currency in El Salvador.

  • While the move marks a world-first, El Salvador's President Nayib Bukele said in a tweet the "bitcoin process" in the country comes with a "learning curve."
  • Bukele stated that "we must break the paradigms from the past." "El Salvador has the right and the obligation to work towards the first world."
  • El Salvador's legislature passed the law on June 9 by a supermajority, with 62 members voting in favor of the bill, while 19 opposed and three abstained. On Tuesday, the crypto became legally tender.
  • Bitcoin's use coincides to the U.S. Dollar, which has been in circulation across the country since 2001.
  • The oldest cryptocurrency in the world can be used to pay for goods, services and taxes. Every economic agent must accept bitcoin as a legal payment method under the law.
  • The law has not been without controversy or opposition, with some labelling it as unconstitutional. The International Monetary Fund stated that El Salvador's decision raised several legal, macroeconomic and financial issues in June.
  • Similarly, JPMorgan has suggested El Salvador's economy could face headwinds, suggesting a potential "limitation" on its use case as a medium of exchange may emerge.
  • In a show of support, crypto proponents are buying $30 worth of bitcoin to coincide with Salvadorans getting the same amount preloaded onto a government-sanctioned digital wallet.
  • MicroStrategy CEO Michael Saylor polled 75.489 people and 82% said that they would purchase $30 worth of Bitcoin.
  • On Tuesday, presidential legal advisor Javier Argueta confirmed in an interview that it is mandatory to have an electronic wallet to receive payments in bitcoin, despite the fact that the payment may not be received in that cryptocurrency but in dollars.
  • A day before the law came into effect, El Salvador purchased its first 200 BTC, with Bukele saying the country's brokers would be buying a lot more.
  • The market capitalization of the largest crypto in the world is now up 2.3% during a 24-hour period. It currently trades for $52,600.