Cryptocurrencies are making a lot of buzz around nowadays. People are looking forward to knowing about this new mode of transaction. Cryptocurrencies are pretty much similar to conventional currencies; the possessor of the cryptocurrencies can make transactions in it if the cryptocurrency has been allowed as a mode of transaction in his/her country. Unlike real currencies, the value of cryptocurrencies fluctuates every day. These currencies don’t have a static value like conventional currencies. The value of these currencies is unpredictable and sometimes its dives down to the lowest and sometimes it touches the pinnacle values. Many countries are avoiding cryptocurrencies and banning them as a mode of the transaction while some countries are welcoming cryptocurrencies with both arms open.
in the contemporary world, there are more than ten thousand cryptocurrencies. As for now, only ten cryptocurrencies have been reckoned as the best contender in the market owing to their market capitalization. Bitcoin is one such cryptocurrency that is on the top list of most valued crypto coins in the world. the main reason behind the popularity and hype of cryptocurrencies is their future perceptibility, investors and supporters of cryptocurrencies reckon that these virtual coins are the future mode of transaction. These people believe that one day cryptocurrencies will take over normal currencies. The country which has adopted bitcoin as a legal currency and a legitimate tender in El Salvador. The decision came from the government on June 9, 2021. The news circulated over the world after the revelation of media reports from El Salvador.
The media report stated that the proposal of the president (Nayib Bukele) of El Salvador to accept cryptocurrency as a legal tender has been accepted. The news created huge enthusiasm among the investors and supports cryptocurrencies. People are applauding the move of the government of El Salvador to make cryptocurrency a legal currency. The acceptance of the proposal was made with the help of voting. Almost sixty-two people among the eighty-four government officials of El Salvador have voted in the favour of the proposal. The proposal was forwarded to make Bitcoin a legal tender in the whole of El Salvador. There are some negative impacts of this proposal, such as it can hamper the mutual relation of El Salvador with IMF (International Monetary Fund). Despite these negative outcomes, the lawmakers of El Salvador have contently accepted the proposal to make Bitcoin legal tender.
President of El Salvador, Mr. Bukele has stated in a statement that the acceptance of this proposal will help in the proliferation of the economy of El Salvador. Citizens and people of El Salvador who are living outside of the country can contribute a lot to the economy of El Salvador by investing/transacting in Bitcoin. Furthermore, Mr. Bukele also said that the U.S dollar will be perpetually used as a mode of legal transaction and tender. There will be no change in the transaction process with the U.S dollar. The interesting thing is El Salvador is one such country that does not have its currency. The proposal to make Bitcoin a mode of legal tender came at a very rapid pace. El Salvador’s president said that he is in talks with La Geo (a state-owned geothermal electrical firm) to furnish a detailed outline to mine bitcoin with the help of geothermal energy.
La Geo will establish further geothermal firms because the process of mining Bitcoin requires a lot of energy and high specification of computers. Further Mr. Bukele also said that La Geo can utilize renewable energy to mine Bitcoin from volcanoes of El Salvador. The geothermal company is inclined to make a detailed plan to produce renewable energy and the process will start soon. Mr. Bukele also said that he is inclined to make El Salvador a mining hub of Bitcoins with the help of geothermal energy. The country has an enormous source to generate Geothermal energy and that energy can be infused in mining Bitcoin. Furthermore, Mr. President also said that anyone who possesses at least three Bitcoins,/will get citizenship of the country. The possessor of the Bitcoin will have to show proof of possession to get the citizenship of El Salvador.
This move of the government of El Salvador will attract a lot of people and hence they will contribute to the development of the nation and proliferation of the economy. The plan to make Bitcoin a legal currency in El Salvador will not create any kind of hurdles for common citizens of the country. Even the users and possers can freely make any transaction with their cryptocurrency in the country El Salvador without any hesitation. The country has made a detailed plan and instructed BANDSEAL bank to obey the norms of implementation of Bitcoin. El Salvador has infused $150 million with BANDSEAL bank for the proliferation of Bitcoin. Furthermore, lawmakers have also instructed several governmental and non-governmental bodies to accept Bitcoins as a legal tender. In the rules and implementation of Bitcoin, it has also been observed from the notification that people of El Salvador can pay their taxes in cryptocurrencies.
The president of El Salvador also said that even common people can buy goods with Bitcoin if a person goes to any café/restaurant and have a burger and he/she decides to pay in Bitcoin. The café/restaurant owner or cashier will have to accept it without a single thought. The proper use of bitcoin as a legal mode of currency will start in ninety days. The exchange rate of Bitcoin with the dollar will be based on the international market. Further, the president also said that for now neither the government nor the banks of El Salvador possess any Bitcoin. The decision to implement Bitcoin as a legal currency can cause a lot of hurdles in the way towards the development of El Salvador. International Monetary Fund had restricted the use of cryptocurrency as a mode of transactions. Although, IMF stated that people can invest in cryptocurrencies but they can’t use them as legal tender.
Scholars and analysts around the world think that the move of the president of El Salvador to legalize Bitcoin will complicate the relationship of the country with the IMF. El Salvador has been in the talk with IMF to seek $ 1 billion for the development program of the country. Mr. Bukele also referred in a statement he will make contact with IMF to talk about Bitcoin implementation in the country and laws related to it. Let’s see whether the talk with IMF will help Mr. Bukele or not. Bitcoin is undoubtedly the most valued cryptocurrency in the world. currently, its market cap has reached beyond $735.3 billion. There is a lot of conundrums among investors owing to the future of cryptocurrencies. Some people believe that these virtual coins will one day replace conventional mode of payment and currency while there are some scholars and investors who think that cryptocurrencies won’t persist in the future.
Cryptocurrencies are surprisingly volatile and a currency will have to be stable for its acceptance among people as a mode of transaction. The non-supporter of the cryptocurrency also stated that the cryptocurrency doesn’t generate any cash flow so we can reckon it as a good investment for the future. Many countries are welcoming cryptocurrencies and accepting this virtual coin as a mode of transactions. While there are countries like India and China which have restricted any kind of transaction in cryptocurrencies. Bitcoin is a cryptocurrency that is banned in several countries like India and China. Let’s see what the future has decided for Bitcoin and other cryptocurrencies. El-Salvador’s move to make Bitcoin a legal mode of transaction and the holder can avail the citizenship is quite weird but promising. We hope that some of those cryptocurrencies gain stability and people adopt these virtual coins as a mode of transactions and investment.
