In recent months, the Central American country of El Salvador has made news headlines around the world following their announcement to make bitcoin legal tender, becoming the first country to do so. This has been met with a mixed reaction from financial institutions, such as the World Bank and the International Monetary Fund, due to the historically volatile nature of the cryptocurrency. However, El Salvador remains optimistic that they will soon become the new leading haven for Bitcoin.
In addition to the implementation of the legislation making bitcoin legal tender, El Salvador has also announced that they will be mining for bitcoin in an environmentally friendly manner. By taking advantage of the untapped geothermal energy produced from the country’s volcanoes, El Salvador is seeking to benefit from an economic boost through bitcoin mining. This article will focus on the introduction of bitcoin as legal tender, as well as the environmentally friendly mining process, and how they both have potential to benefit El Salvador.
The Bitcoin Law
On June 8, 2021, El Salvador became pioneers in the world of Bitcoin by passing their “Ley Bitcoin” (Bitcoin Law) through congress, resulting in bitcoin becoming legal tender in the Central American country as of September 7, 2021. Further to this, the government continues to promote the cryptocurrency by giving $30 worth of bitcoin to citizens who sign up for their national digital wallet known as Chivo. Foreigners who invest three bitcoin in the country will also be granted residency in an attempt to further promote El Salvador as a cryptocurrency-friendly destination.
Inevitably however, despite dispelling the fear from the potentially harmful environmental impact bitcoin mining may have, the promotion of bitcoin through the Bitcoin Law has led to skeptics calling out the passing of this law as a gamble,
