President Nayib Bukele has announced that the small Central American state is expected to give the famous cryptocurrency legal tender in the coming days.
Will it soon be possible to buy bread with bitcoins? El Salvador, a small state in Central America, is taking this path. The whimsical President Nayib Bukele announced last weekend that he would propose a bill to this effect in the assembly the week of June 7. And when we know that the latter does not hesitate to send the army to Parliament to force the vote of deputies …
Increase the population’s resources
«I will send to Congress a bill that will convert bitcoin into legal tenderNayib Bukele said in a video message presented at the Bitcoin 2021 conference held in the US city of Miami on June 4 and 5. The aim is to generate jobs and “enable financial inclusion for thousands of people who are outside the legal economy“, He explained, specifying that”70% of the population does not have a bank account and works in the informal economy“. The Salvadoran government has not yet detailed the bill to be considered by parliament, dominated by the president’s allies.
In El Salvador’s dollarized economy, Salvadorians’ remittances from abroad are a significant support and equivalent to 22% of gross domestic product (GDP). According to Nayib Bukele, bitcoin represents “the fastest growing way to transfer“These billions of dollars in remittances and to prevent”millions of dollarsDo not go into the pockets of intermediaries. “Through the use of bitcoin, the amount received by over a million low-income families will increase by billions of dollars each year. It will improve the lives and futures of millions of people», Affirmed the president.
Getting out of dollar addiction
Bitcoin is a decentralized asset with no direct connection to the real economy, which is based on blockchain technologies. This cryptocurrency remains very volatile, as evidenced by the price drops in May. But the decision to use this currency could have another reason, namely to get out of the tutelage of the US dollar.
« There is a desire on the part of El Salvador to gradually move away from the zone of influence of the dollar or, in any case, to have an alternative, estimated Monday, June 7 on BFM Business Wilfrid Galand, strategy director at Montpensier finance, a French asset manager. (…) The United States accounts for more than 35% of El Salvador’s exports. We have a very strong dependence which, in addition, is linked to the dollar. So any American decision on its financial system has a direct impact on the country’s economy. (…) More than the issue of bitcoin, it is a problem of national independence, a decision linked to the extraterritoriality of the dollar. »