El Salvador became the first country in the world to introduce cryptocurrency as its official means of payment on Monday. What it will do to the country’s economy is still unclear.
The Central American country introduced Bitcoin as the official currency on Tuesday. President Nayib Bukeles hopes that the country will be at the forefront of the world of cryptocurrencies.
Last year alone remittances to El Salvador amounted to almost $6 billion, or 23% of its gross domestic product, one of the highest ratios in the world.
One may ask what it does for the benefit of the inhabitants in everyday life. According to a survey, ninety-five per cent say they do not even know what Bitcoin is. It is also a currency that fluctuates a lot. From being up to 60,000, it dropped to 10,000 dollars.
Support for the introduction of cryptocurrency is not high. A lot of it is because you do not know what this will mean for the country’s economy. A majority does not even want this.
The president himself tweeted that there may be an uphill climb. But just like with all technological innovations, everyone will learn and absorb.
On Monday, El Salvador bought its first 400 of the cryptocurrency, temporarily pushing prices for bitcoin 1.49% higher to more than $52,680. The cryptocurrency has been notoriously volatile. Just this spring, it rose over $64,000 in April and fell almost as low as $30,000 in May.
Bitcoin Entices with money
The bitcoin adoption idea has been to place 200 ATMs where you can exchange Bitcoins for US dollars and withdraw cash, a move which was set to encourage citizens to adopt the new payment method, with the government now giving a start-up bonus.
— Binance (@binance) September 7, 2021
Everyone who opens an electronic wallet receives a deposit of approximately 30 U.S Dollars.
– A significant difference is that one can describe cryptocurrency as private money and traditional currency, such as the Kenyan shilling or dollar, as state centrally controlled money.
with the fiat currencies, the government-appointed officials such as the Central Bank of Kenya Governor or the Fed chair of the Federal reserve bank of the United States can sit with the interest rate wheel and pull up or down.
While cryptocurrency is completely private. The only thing that really governs is a protocol that once created the cryptocurrency.
The US dollar introduced in 2001 will continue to remain in the country. The country has no currency of its own.