Uptick in BTC price as El Salvador first to adopt Bitcoin as legal tender

09 Jun 2021

Bitcoin headed towards the $35,000 mark on Wednesday, up 5%, bolstered on the news that El Salvador becomes the first country to adopt the cryptocurrency as official legal tender.

According to data from Cointelegraph Markets Pro and TradingView, there was a rapid uptick in BTC/USD on Wednesday on the announcement.

Earlier on Wednesday, President of El Salvador, Nayib Bukele sent the law to the country’s Congress for a vote, CNBC reports, securing 62 out of 84 votes.

The law states: “The purpose of this law is to regulate Bitcoin as unrestricted legal tender with liberating power, unlimited in any transaction, and to any title that public or private natural or legal persons require carrying out.”

The exchange rate with the U.S. dollar “will be freely established by the market,” in accordance with the proposed law, and El Salvador will also “promote the necessary training and mechanisms so that the population can access Bitcoin transactions.”

Around 70% of the country does not have access to traditional financial services.
deVere CEO and founder, Nigel Green said of the landmark decision by El Salvador: “Where El Salvador has led, we can expect other developing countries to follow.
“This is because low-income countries have long suffered because their currencies are weak and extremely vulnerable to market changes and that triggers rampant inflation.”

He added: “This is why most developing countries become reliant upon major ‘first-world’ currencies, such as the U.S. dollar, to complete transactions. 

“But reliance on another country’s currency also comes with its own set of, often very costly, problems.”

As an example, a stronger U.S. dollar will impact the outlook of emerging markets, as developing countries have taken on so much dollar-denominated debt in recent decades.

The deVere CEO added: “By adopting a сryptocurrency as legal tender these countries then immediately have a currency that isn’t influenced by market conditions within their own economy, nor directly from just one other country’s economy. 

“Bitcoin operates on a global scale and is, as such, largely impacted by wider, global economic changes.”