El Salvador plans to adobt Bitcoin as Legal Tender
There are a handful of countries that use the dollar as their main currency such as Ecuador, El Salvador, and Zimbabwe. Those countries are subject to the whims of the United States and its financial policy. It was a good option for a country to protect its citizens from inflation when the US monetary policy aligned with their goals.
El Salvador is potentially going to make Bitcoin legal tender resulting in less dependence on the US Dollar. El Salvador has millions of unbanked individuals. Once could assume that a large portion of them have a cell phone or have a family member with a cell phone. This will allow those individuals for the first time to participate in the digital economy. They will have the same ability to loan and borrow and stake that the rest of us have. They will be able to order stuff on Amazon in just a few years and use Bitcoin. Maybe sooner.
Other countries are also considering the move. If countries start adopting Bitcoin as legal tender, it will become too big to fail. Countries that adopt Bitcoin will need to protect their interest by building nodes and starting mining operations. Those operations will be protected by the military just like if it was the central bank or Ft Knox. They won't allow it to go down.
In 2021, the government of El Salvador announced a plan to adopt Bitcoin as legal tender in the country. Here are some key points about this plan:
Bitcoin adoption: The government of El Salvador plans to adopt Bitcoin as a legal tender alongside the US dollar, which is already the country's official currency. This means that Bitcoin will be accepted as a means of payment for goods and services in the country.
Bitcoin infrastructure: The government plans to invest in infrastructure to support the use of Bitcoin, including building out a network of Bitcoin ATMs and supporting the development of a digital wallet app.
Bitcoin regulation: The government plans to put in place regulations to support the use of Bitcoin, including measures to prevent money laundering and other illegal activities.
Bitcoin benefits: The government believes that adopting Bitcoin as legal tender will bring economic and social benefits to the country, including attracting investment and boosting tourism.
Bitcoin challenges: There are also challenges associated with adopting Bitcoin as legal tender, including the volatility of Bitcoin prices and the need to educate the public about the use of cryptocurrency.