Bitcoin Voted in as Legal Currency in El Salvador

Reading Time: 2 minutes
  • El Salvador has voted to accept Bitcoin as a legal currency
  • The legislative assembly tweeted that the motion had carried with 62 votes
  • The move takes Bitcoin to a new level of adoption

El Salvador has officially become the first country in the world to recognize Bitcoin as legal tender. The country’s legislative assembly voted today on the proposal from President Nayib Bukele to make Bitcoin a formal currency alongside the U.S. dollar, and with a majority of 62 votes the motion was carried. This means El Salvador enters the history books as the first country to afford Bitcoin the same status as fiat currency, something that was unthinkable just a few short years ago.

Bukele Writes his Names in the History Books

Bukele had already become a figurehead for Bitcoin after he announced during the Bitcoin conference in Miami that the country was seeking to make Bitcoin a legal currency. Even if it had failed he would have still held hero status within the community for trying, but a tweet from the El Salvadoran legislative assembly in the early hours of this morning confirmed that the vote had passed:

The acceptance of Bitcoin as legal tender in El Salvador marks a watershed moment in the history of Bitcoin, which has gone from being a technological experiment to a fully fledged currency in just 13 years. The glass ceiling has been well and truly smashed, and with other countries such as Paraguay and Argentina also said to be looking at Bitcoin in a similar way to El Salvador, we could well see Bitcoin enter a new phase of adoption that even Satoshi Nakamoto himself would have hardly dared dream about.

Not Everyone Happy With Bitcoin Acceptance

Predictably, not everyone is thrilled with the development. Siobhan Morden, head of Latin America fixed income strategy at Amherst Pierpoint Securities, told Reuters that the development would “likely further complicate and delay IMF technical discussions,” adding that while the move might be nothing more than “a flashy PR tactic” it illustrated a “lack of coordination” and evidenced absence of “a cohesive economic plan.”

Morden also warned that Salvadorian bonds faced a risk premium attached to the acceptance of Bitcoin of as much as 75 basis points over comparable Costa Rica bonds.