President El Salvador wants to make Bitcoin legal tender

The president of the South American country El Salvador wants to accept Bitcoin as legal tender. A proposal to that effect will go to Congress. This would, among other things, save on transaction costs when residents receive money from relatives abroad.

According to President Nayib Bukele Every year, six billion US dollars is transferred to residents of El Salvador, for example by people who work abroad and financially support family in El Salvador. Not only would the transaction fees take “a big bite” out of that money, but because 70 percent of Salvadorans wouldn’t have a bank account, they would have to physically collect the money from a broker. Currently, the US dollar is the only legal tender.

The 39-year-old president, the youngest in South America, announced the news in a video message during a presentation by Jack Mallers, at the Bitcoin Conference in Miami. Maller’s payment platform Strike has to build the necessary infrastructure for the country to use Bitcoin. The transactions would use the Lightning Network protocol for speed.

Bukele’s political party GANA has five of the 84 seats in the Asamblea Legislativia, but also has an alliance with Nuevas Ideas, which was founded by Bukele and is the largest party in the chamber. Together they have 61 seats. Should this alliance approve Bukele’s proposal, Bitcoin will be legal tender in the country. El Salvador has a unicameral system, so the proposal does not also have to pass a ‘senior house’.