El Salvador officially recognizes Bitcoin as a legal tender.
A supermajority of the El Salvadoran Legislature voted to adopt bitcoin as legal early Wednesday morning. The Legislature voted in favor of President Nayib Bukele’s proposal to accept Bitcoin. The president intends to sign later tonight or early in the morning.
Out of the total of Eighty-Four votes, Sixty-Two members of the Legislature voted in favor of the bill with 19 opposed and 3 abstentions.
Further Details Provided by the President
This bill will mandate all businesses to accept bitcoin for goods or services, but the government will be supportive of the entities who aren’t willing to take risk of a volatile cryptocurrency, he said.
The government will set up a trust at the Development Bank of El Salvador to convert bitcoin to U.S.Dollars instantly. The trust fund will hold $150 million in dollars.
This is an example given by the President in a Twitter Space conversation “If there’s an ice cream parlor, he doesn’t really want to take the risk, he has to accept bitcoin because it’s a mandated currency but he doesn’t want to take the risk of convertibility, so he wants dollars deposited in his banking account, when he sells the ice cream, he can ask the government to exchange his bitcoin to dollars,” he said. “Of course he can do that in the markets also but he can ask the government to do it immediately.”
The trust fund will sell some of the received bitcoin to replenish the fund.
Government officials from El Salvador will meet with the International Monetary Fund in the coming days to discuss the plan.
Bukele’s also indicated that the government may promote bitcoin mining. El Salvador has already been hoping to draw businesses with excess geothermal energy, and while the government isn’t specifically looking to the bitcoin mining industry to fill that need, it is one such sector that could benefit.
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