Tomorrow, history will be written as El Salvador becomes the first country in the world to adopt bitcoin as legal tender. In a movement of empowerment, the small government of Central America will take an act of courage to strengthen its economy and democratize the financial sovereignty of its people.
Access to the traditional banking system is limited in El Salvador because more than 70% of the population does not have a bank account. But starting tomorrow, millions of Salvadorans will be able to legally use bitcoin to store and process value, reducing some barriers and increasing access to financial services.
Unlike the authorized banking system, which determines who can join and under what conditions, Bitcoin is independent from the government and without authorization. Anyone on Earth can use a mobile device with an internet connection to be inserted into the Bitcoin ecosystem, almost effortlessly accessing solid cash at their fingertips.
Compared to inefficient credit scores, bank transfers, physical facilities, the need for permission to store and transfer money, and the limited availability of all traditional financial services, Bitcoin allows final settlements without bureaucracy. At any time of the year, anyone can conduct valuable transactions through the Bitcoin network securely, without authorization, and without trust.
Bitcoin doesn’t care who you are and who you transact with, but it does offer both parties verifiable, trustless transactional security and consensus. Not a single user of the Bitcoin network needs to believe another – or anything for that matter – will behave a certain way because it doesn’t matter. Salvadorans will be able to extract the most use and value from Bitcoin, facilitating long-term savings as well as short-term transactions.
In a broader sense, Bitcoin could also bring tourism and business to El Salvador. Not only does Bitcoin adoption generate positive marketing and awareness, like MicroStrategy’s Michael Saylor knows, but it also creates an attractive avenue for people and businesses interested in the money revolution, with Bitcoin’s total clarity being a distinctive advantage for El Salvador.
Miners, for example, might find this Central American country a great place to start a business, as El Salvador is also home to abundant, cheap, and clean energy. The country’s volcanoes offer BTC miners a unique opportunity – something that President Nayib Bukele has already called for.
Moreover, having adopted a stateless currency, the country will also attract citizens of the world to visit or even live there. The combination of beautiful beaches and friendly regulations and taxes could be enough to bring many Bitcoiners to the small territory, further developing and nurturing the local economy. Additionally, as legal tender, bitcoin will not incur any capital gains tax.
But more importantly, Bitcoin will assure Salvadorians that their money will not be degraded. – no matter what. By opting for bitcoin, Salvadorans will have the ultimate financial sovereignty, being able to use their money for whatever reason or purpose they see fit, while being confident that their purchasing power will not diminish. By pushing for monetary certainty and financial sovereignty, Bitcoin restores economic freedom and peace, and El Salvador will be the first country that can reap these benefits most vividly.