El Salvador has enacted legislation that makes it the world's first sovereign country to accept Bitcoin as legal currency alongside the US dollar.

(Photo : Joe Raedle/Getty Images)
An attendee wears a necklace at the Bitcoin 2021 Convention, a crypto-currency conference held at the Mana Convention Center in Wynwood .

President Nayib Bukele introduced El Salvador's partnership with digital pockets firm

In a published article in TWL News, El Salvador's president announced the nation's partnership with digital wallet firm, Strike, to construct the country's modern monetary infrastructure utilizing Bitcoin know-how. The announcement was first made in a video broadcast to Bitcoin 2021, a multiday convention in Miami billed as the most important Bitcoin occasion in the historical past.

El Salvador is mostly a cash economy, with around 70% of the population without bank accounts or bank cards. Remittances, or money sent home by migrants, contribute to more than 20% of El Salvador's gross domestic product.

While details on how the rollout will operate are still pending, El Salvador has formed a team of cryptocurrency professionals to aid build a completely new monetary ecosystem using Bitcoin as the foundation layer, according to a published report in the Business World.

Read Also: How the Weakening of the US Dollar is Causing Bitcoin Prices to Rise

Strike Founder releases a statement

Strike CEO Jack Mallers said "What's transformative here is that Bitcoin is both the greatest reserve asset ever created and a superior monetary network. Holding Bitcoin provides a way to protect developing economies from potential shocks of fiat currency inflation," according to a published article in TWL News.

Speaking from the stage, Mallers said that the transfer would help release the power and potential of cryptocurrency for everyday usage situations on an open network, benefiting individuals, businesses, and public sector organizations. Meanwhile, the CEO of Blockstream Adam Back said that he intends to contribute technologies such as liquid and satellite TV for PC infrastructure to make El Salvador a model for the rest of the world.

Bitcoin Price jumps after the announcement of El Salvador

According to a published article in CNBC News, Bitcoin soared on Thursday, a day after El Salvador enacted legislation making Bitcoin legal. The cryptocurrency increased by 6% to be over $37,000. According to CoinDesk statistics, it last traded at $37,653.44 at 8:18 a.m. ET.

Bitcoin supporters, who have long seen digital currency as a viable alternative to traditional currencies, applauded El Salvador's actions. The government has entered into an agreement with digital wallet firm Strike to construct the nation's new financial infrastructure utilizing Bitcoin technology.

Other cryptocurrencies were also boosted, with Ether and XRP trading higher. However, Bitcoin is still a long way from its all-time high of $64,829.14 set in April. This will also have a significant effect on other small digital coins or alternative coins.

Bitcoin is noted for its extreme price fluctuations, which have led some detractors to claim that it is unsuitable for use as a currency. El Salvador's situation will be widely followed to determine if Bitcoin may be used as a payment tool on a national scale.

The Central American country's legislature enacted a measure making Bitcoin legal money on Wednesday. It implies that pricing may now be shown in Bitcoin and tax contributions may be paid using the digital currency, among other things.

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