El Salvador may become the first nation to make Bitcoin legal tender, joining a host of Latin American nations that are turning to digital currency to fight both inflation and potential corruption.
Nayib Bukele, the current President of El Salvador addressed the Bitcoin 2021 Conference in Miami via a prerecorded video. In the video, Bukele states that in the coming weeks, he will introduce a bill that would make Bitcoin legal tender in El Salvador.
Strike CEO Jack Mallers commented
“Over 70% of the active population of El Salvador doesn’t have a bank account. They’re not in the financial system…They asked me to help write a plan and that they viewed bitcoin as a world-class currency and that we needed to put together a bitcoin plan to help these people.”
One reason why many Salvadoreans don’t have a bank account is due to the high cost of banking services relative to income. While many in the global North don’t think about banking services as being expensive, in many nations, they are prohibitively costly.
Bitcoin and Crypto is The Right Direction
In many cases, nations that have a high percentage of impoverished citizens also have a low number of citizens with access to financial services. This is true in Latin America, as well as India, and many other areas of the world.
Sadly, poor nations also have a track record of abusing their financial systems to benefit a dominant political party, and also further antagonize the poor that simply don’t have the means to finance their lives in any other way.
Without a viable alternative, many poor people are left in a truly hopeless situation, and many may not understand that it is being done to them via regulations at a national level.
Clearly, El Salvador isn’t on the same path as Venezuela, or India, at least in a monetary sense. The move by Bukele to use Bitcoin as a currency in the nation will help to raise the profile of cryptos globally, which is likely a good thing for the global poor.