El Salvador is developing a bill to acknowledge Bitcoin [BTC, +0.30%] as a legal tender, consistent with President Nayib Bukele. Within an official videotaped announcement earlier on Saturday, he revealed he will submit the bill next week.
Zap’s Jack Mallers outlined that the news at the Bitcoin 2021 conference in Miami. He said his company is working with Bukele to implement an idea.
The bill must still be reviewed by the country’s legislature. But with the populist Bukele’s upstart party in firm control of that body, approval seemed about assured Saturday afternoon.
The bill’s approval would likely make El Salvador the primary nation to adopt a bitcoin standard. Its full text wasn’t immediately available.
“As of now, El Salvador is the primary bitcoin country,” Mallers said. “And the first country to form bitcoin tender and treat it as a world currency and have bitcoin on their reserves.”
But it’s not yet clear what being “the first bitcoin country” will mean for the fiscally unstable and oppressively poor Central American nation, where 70% of residents even lack a basic banking account. El Salvador’s gross domestic product was $24.6 Bln earlier in 2020, consistent with Statista.
The 39-year-old Bukele claimed in recorded remarks that his plan will have short-term benefits for thousands of unbanked individuals. He also claimed it’ll generate jobs.
“And within the medium and in mere future, we hope that this decision can help us push humanity, a minimum of a small bit into the proper direction,” Bukele outlined.
Mallers framed Bukele’s announcement as pushing back against “unprecedented monetary expansion.” He placed particular blame on the United States Federal Reserve for “crushing emerging markets” like El Salvador’s dollarized economy by printing greenbacks ad-nauseum.
A brief excerpt of what seemed to be Bukele’s bill harped on an identical theme: “Central banks are increasingly taking actions that will indeed cause harm to the economic stability of El Salvador.”
The excerpt continued:
“In order to mitigate the negative impact from central banks, it becomes necessary to authorize the circulation of a digital currency with a supply that can’t be managed by any financial institution and is merely altered as per the objectives and calculable criteria.”
Bitcoin, the decentralized, hard-capped, stateless, decade-old digital currency, would seem to suit that criteria.
El Salvador’s plan sits in stark contrast to a competing vision of cash gaining traction among central banks. Around 80% are studying CBDCs within a global push to form fiat more compatible with the digital economy.
None, however, have seriously considered implementing that via a cryptocurrency beyond their management.