Bitcoin is Legal Tender; what does it mean for El Salvador?
June 9, 2021, will be permanently etched in Bitcoin and crypto history for what happened in El Salvador.
Following a proposal by President Nayib Bekele, El Salvador became the first country in the world to approve Bitcoin, making it a legal tender.
Legal tender? What does this even mean?
Let me illustrate with an example.
In the U.S., the USD is the official legal tender.
The Yuan in China fits that bill too.
When a country's laws acknowledge ' something' as legal tender, it means citizens or international partners can legally use it to settle private and public debt.
What's more, citizens can fulfill their fiscal responsibility, pay their taxes, contractual obligations, damages, fines, and more, using that asset.
In this case, that 'thing' is Bitcoin.
Officially, this makes Bitcoin money in El Salvador—an immense development.
While we know that Bitcoin is internet native and a medium of exchange, El Salvadorans can securely use the network to remit billions of USD from the diaspora.
Still, let us not forget that the USD is also the legal tender in the country.
The country's note and coin, the colon, is in circulation but is rarely used.
It has been exactly 20 years since El Salvador gave up on its monetary policy.