The law states that “all economic agents shall accept bitcoin as a form of payment when it is offered by a buyer of a good or service.” It also says that tax payments can now be made in bitcoin.
Bukele, 39, is a right-wing populist who came to power in 2019. He previously said that El Salvador would partner with digital finance company Strike to set up the necessary infrastructure to support the use of bitcoin as an official currency.
future of digital currencies
However, the rise in the popularity of crypto has prompted the US Federal Reserve to keep a close eye on old-fashioned dollar limits – particularly around payments and money transfers that can take several days to complete. Bitcoin transactions happen almost instantly.
Cryptocurrencies also do not require a bank account. Instead, they are kept in a digital wallet. It can help people in poor communities – such as many in El Salvador but also minority communities in the United States – increase their access to finance.
A member of the Federal Reserve Board of Governors, Lyle Brainard, laid out a case last month for a secure, central bank-backed digital currency that could create a more efficient payment system and expand financial services for Americans who need to be able to pay more money. has been reduced by traditional banks.
Federal Reserve Chairman Jerome Powell announced in May that the central bank would publish a paper this summer outlining the board’s thinking on the benefits and risks associated with a digital US dollar.
Although cryptocurrencies such as bitcoin are digital, the central bank digital currency will be fundamentally different from existing crypto as it will still be controlled by a central bank rather than a decentralized computer network.
— Stefano Pozzebon, Jorge Engels and Allison Morrow contributed to this report