A bill has been passed by the El Salvadoran Legislature to make Bitcoin a legal tender in the country.
The bill was passed on Wednesday after it was voted in favour of President Nayib Bukele’s proposal for the country to adopt Bitcoin as a legal tender.
The vote was won by a supermajority of 62 out of 84 votes.
He took to Twitter to celebrate.
The president intends to sign this new bill into law later tonight or early in the morning.
The President of El Salvador, Nayib Bukele, provided further details about his plans and how his bill will help to boost financial inclusion in a country where 70% of citizens do not have access to financial services.
The President said users won’t necessarily have to use a government wallet. the bill will mandate all businesses to accept bitcoin for goods or services but the government will act as a backstop for entities that aren’t willing to take on the risk of a volatile cryptocurrency.
A trust that the government will set up at the Development Bank of El Salvador will act as a clearinghouse to instantly convert bitcoin to U.S. dollars and take on merchants’ risk.
The trust will hold about $150 million dollars.
The President said:
“If there’s an ice cream parlour, 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.”
Bukele further said:
“Of course he can do that in the markets also but he can ask the government to do it immediately.”
The President also made it clear that the Development Bank’s trust fund would sell some of the bitcoin it receives for dollars to replenish the fund over time as it is being used up.