El Salvador’s Legislative Assembly has approved legislation making crypto currency Bitcoin the legal tender in the country, the first country to do so just days after President Nayib Bukele made the proposal at a Bitcoin conference.

The digital currency can be used in any transaction and any business will have to accept payment in Bitcoin, except those lacking the technology to do so. The U.S. dollar will continue to be El Salvador’s main currency and no one will be forced to pay in Bitcoin, according to the legislation approved late Tuesday.

“Every restaurant, every barber shop, every bank — everything can be paid in U.S. dollars or Bitcoin and nobody can refuse payment,” Mr. Bukele said in an hourl ong social media hangout with thousands of U.S.-based Bitcoiners as the bill was being debated Tuesday night.

The exchange rate between the two currencies will be established by the market. The dollar will continue to be the currency of reference.

The Economy Ministry noted that 70 percent of Salvadorans do not have access to traditional financial services and that the country “needs to authorize the circulation of a digital currency whose value exclusively follows free market criteria” to stimulate growth.

The law would create mechanisms to help Salvadorans, especially small businesses, quickly convert payments they receive in Bitcoins into dollars — helping them avoid the risk of the value plummeting, as it has in recent days.

“They have to take the Bitcoin, but they don’t have to take the risk,” Mr. Bukele said. “We might earn some money or we might lose some money, but it doesn’t matter. The purpose of the trust fund is not to make money but to support making Bitcoin a legal tender.”

Courtesy (excluding headline) AFP

Update news