Bitcoin Is an Official Currency in This Country

Bitcoin Is an Official Currency in This Country

Ephrat Livni and Oscar Lopez 🏦 Reporting on cryptocurrency

Bitcoin Is an Official Currency in This Country

Ephrat Livni and Oscar Lopez 🏦 Reporting on cryptocurrency
Jose Cabezas/Reuters

El Salvador became the first country to make Bitcoin legal tender, encouraging citizens and businesses to transact in the cryptocurrency.

Here’s why they did that and how the country reacted →

Bitcoin Is an Official Currency in This Country

Ephrat Livni and Oscar Lopez 🏦 Reporting on cryptocurrency
Jose Cabezas/Reuters

Why did El Salvador adopt Bitcoin

President Nayib Bukele said adopting Bitcoin would make payments cheaper and faster and would encourage foreign investment. Many Salvadorans do not have bank accounts, but most have phones and could use Bitcoin.

Bitcoin Is an Official Currency in This Country

Ephrat Livni and Oscar Lopez 🏦 Reporting on cryptocurrency

What are the risks of adopting Bitcoin?

Experts say adopting Bitcoin could bring instability and unnecessary risk to El Salvador’s fragile economy. International financial regulators have also voiced legal concerns.

The World Bank and the International Monetary Fund say making Bitcoin an official currency could leave a country open to money laundering and other illicit financial activity.

Bitcoin Is an Official Currency in This Country

Ephrat Livni and Oscar Lopez 🏦 Reporting on cryptocurrency
Jose Cabezas/Reuters

How is it going?

On Tuesday, companies such as McDonald’s and Starbucks began accepting Bitcoin in El Salvador. But the government’s app for facilitating transactions temporarily went offline.

Bitcoin Is an Official Currency in This Country

Ephrat Livni and Oscar Lopez 🏦 Reporting on cryptocurrency
Jose Cabezas/Reuters

What has the reaction been in El Salvador?

Protesters took to the streets to denounce the move, and the price of Bitcoin dropped sharply, demonstrating its volatility.

Bitcoin Is an Official Currency in This Country

Ephrat Livni and Oscar Lopez 🏦 Reporting on cryptocurrency

What’s next?

Crypto enthusiasts say Bitcoin is best understood as a proxy for the bigger world of alternative financial services that is quickly emerging online. It could serve billions of the unbanked worldwide, fostering financial inclusion via mobile phone connections.

But financial regulators around the world are scrambling to catch up with the developments.

Read more about El Salvador’s adoption of Bitcoin .

NewsNow

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