As the global monetary system threatens to unwind, El Salvador is hedging its bets by looking to become the first country on earth to recognise Bitcoin as legal tender.
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El Salvador Bets on Bitcoin
El Salvador will be the first country on Earth to adopt the Bitcoin standard, with the country’s President Nayib Bukele announcing the revelation over the weekend.
Speaking in a pre-recorded video message at Bitcoin 2021, Bukele revealed the he will be tabling a bill to the country’s congress next week.
He said: “In the short term, this will generate jobs and help provide financial inclusion to thousands outside the formal economy. And in the medium and long term, we hope that this decision can help us push humanity, at least a tiny bit into the right direction.”
Founder of Bitcoin payments and remittsances company Strike, Jack Mallers, introduced the video revealing that he had been working in El Salvador to help bitcoin gain traction. In an impassioned speech, Mallers read an excerpt from the bill, which outlined the country’s intentions to adopt a fixed supply cryptocurrency “to mitigate the negative impact from central banks”. At the same time, Mallers confirmed that Strike would open an “innovation HQ” in El Salvador, adding that “Today, humanity takes a tremendous leap forward in reinstalling human freedom and financial inclusivity.”
Notably, the bill will still have to be approved, but nevertheless this is a huge step forward for Bitcoin, and marks the kindling of countries seriously looking to adopt the Bitcoin monetary standard.
On Twitter, Bukele added that he has hopes for Bitcoin to improve El Salvador’s economic situation. He pointed out that 70% of the country’s population is unbanked and working in the informal economy, adding that he believes the move towards the asset “will improve the lives and the future of millions”.
Central Bank Balance Sheets Explode
The news comes weeks after Central Bankers like the US Federal Reserve and the European Central Bank (ECB) announced accelerations in the development of Central Bank Digital Currencies (CBDCs). Digital natives even mildly familiar with cyrptocurrencies are aware that CBDCs are beholden to the same bureaucratic and political structures of fiat currencies which have exacerbated the divide between rich and poor through inflation.
The Fed’s balance sheet is set to reach $9 trillion by 2022 – a figure which the ECB has already blasted through as all caps on printing money were removed.
Read More: Fed Embarks down the road of hyperinflation
Such measures place tremendous pressure on countries to hedge their bets against a probable unraveling of the fiat standard. El Salvador appears to be the first country to openly take this course of action.
One small step for Bitcoin, one giant leap for mankind.
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