Bitcoin: Legalised by El Salvador

On 8th June, 2021, El Salvador, a small coastal country in Central America, became the first in the world to make Bitcoin (a digital currency) a legal tender.

Key Points

  • The development in El Salvador changes little in terms of Indian monetary calculations around cryptocurrencies.
  • The dynamic underpinning the whole move is that El Salvador has no monetary policy of its own and hence, no local currency to protect.
  • The country was officially ‘dollarized’ in 2001 and runs on the monetary policy of the US Federal Reserve.

Significance

  • Bitcoinization might change nothing on ground if “legal tender” is to be considered ....
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