El Salvador created history in June after the country’s congress passed the Bitcoin Bill making it a legal tender in the country. The country celebrated Bitcoin Day on September 7 as BTC was officially integrated into the country’s monetary system. President Bukele said that the decision to shift to Bitcoin was done to offer banking services to over 70% of un-banked Salvadorians.
The Chivo wallet has been announced as the national Bitcoin wallet service provider along with the installation of 200 Bitcoin ATMs. The President also airdropped $30 worth of BTC for every adult in the country to promote BTC’s use. Bitcoin’s rise as a legal tender in the country can bring doom to the traditional money transfer businesses especially the likes of Western Union.
El Salvador uses cross-border remittance services such as Western Union and Moneygram at a large scale, which leads to high remittance charges. Last year alone, the people in the small central American nation collectively transacted $6 billion in remittance. President Bukele estimated that if the citizens start using Bitcoin at large, it could cost money transfer services $400 million every year.
The popularity of Bitcoin is evident from the number of wallet downloads in the country. The top-6 finance app in the country is all Bitcoin or crypto-related applications.
After becoming a legal tender in the country, various world-renowned restaurants, and retail giants such as McDonald’s, Starbucks, and Walmart have started accepting Bitcoin payments. The country’s BTC adoption which only a year ago might seem like a joke has triggered a domino effect on other small nations looking for financial breakthroughs.
Ukraine joined the growing list of countries that have legalized Bitcoin use for financial transactions while Panama has introduced a bill for legalizing the use of Bitcoin and Ethereum in the country. El Salvador could become a case study and offer a blueprint for other nations looking to adopt Bitcoin. Remittance is one of the biggest sectors that cryptocurrencies can bring a massive change to, as it could lead to lesser transaction costs and instant transfers.
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