El Salvador President Nayib Bukele announced in the Miami Bitcoin 2021 conference that the Central American country is in the process of adopting Bitcoin as legal tender.
Submitting his proposed legislation known as the Bitcoin Law, the proposal aims to allow the cryptocurrency as currency alongside the circulating US dollar in the country. This proposal came about in part due to the country’s purchasing power being eroded with the expansion of US money circulation during the pandemic.
If successful, it would make the Central American nation the first country to accept the digital currency as part of the national reserves. To implement this. The country would be partnering with digital wallet company Strike, founded by Jack Mallers, to create a financial infrastructure that would facilitate the use of Bitcoin throughout the nation.
Bitcoin’s Beginnings in El Salvador
Starting in the small coastal town of El Zonte in Eastern El Savadore, the idea of using Bitcoin as a currency was mooted with Project Bitcoin Beach in 2019 by its founder Michael Peterson.
Thanks to an anonymous Bitcoin donor who wanted to create opportunities that that solves real economic problems with the cryptocurrency, Michael hit on the idea of working with the local community and companies interested in Bitcoin to create a self-sufficient economy in the town.
To get the project up to speed, Bitcoin Beach guaranteed the liquidity to boost confidence in the system, and helped users set up their own digital wallet with the Wallet of Satoshi app which runs on the Lightning Network.
Fast forward to two years later, and the project is a success. Citizens in El Zonte now pays everything from bills to groceries with Bitcoin, and the ecosystem is supported by companies who facilitates the transfer of the digital currency.
The Bitcoin Beach project has since expanded to the whole region, and there are a few hundred thousand users who use Bitcoin on a regular basis.