Bitcoin surges 16% as El Salvador makes crypto a legal tender

Summary

  • Central American nation El Salvador has become the world's first country to adopt Bitcoin as a legal tender.
  • The bill was passed by the country’s legislative assembly with a majority as 62 out of 84 voted in favour of the move.
  • Boosted by the development, the price of Bitcoin jumped as much as 15.75%.

In a major boost for the cryptocurrency market, El Salvador has officially adopted Bitcoin as a legal tender after Congress gave its nod to President Nayib Bukele’s proposal to embrace the digital coin. With this, the Central American nation becomes the first country in the world to officially adopt Bitcoin as a legal currency.

                         

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The bill was reviewed and passed by the country’s legislative assembly with a majority as 62 out of 84 lawmakers voted in favour of the motion to create a law to adopt Bitcoin. The bill did not face any major obstruction, despite concerns about the potential impact on the country’s program with the International Monetary Fund, as President Bukele’s Nuevas Ideas (New Ideas) party controls the El Salvador Legislative Assembly.

On Monday, President Nayib Bukele had proposed to introduce a legislation to adopt Bitcoin as a legal tender. He had made this announcement at the Bitcoin 2021 conference in Miami, which is being touted as one of the biggest Bitcoin events ever. 

The 39-year-old president had informed the participants that El Salvador was partnering with Strike, a digital wallet company, which will help the country build a modern financial system.

Also Read: Bitcoin As Legal Tender: El Salvador First Nation To Back Cryptocurrency

In a separate development, Carlos Rejala, a Paraguayan Congressman, has also announced to present a bill to attract international mining companies and other crypto businesses. The Central South American nation will become the second country after El Salvador to allow Bitcoin to be treated as a legal tender. 

As per report, Rejala, a 36-year-old entrepreneur, is likely to present the bill next month, which will set favourable regulations for crypto mining and other crypto exchange businesses in the country.

Also Read: All you need to know about stablecoin

Boosted by the development, the cryptocurrency market witnessed a surge in the sale of all the major coins, including Bitcoin, Ethereum, Dogecoin, and XRP, which are flashing in green.

Reacting to the news, the price of Bitcoin jumped as much as 15.75% in the past 24-hour trade. The world’s largest cryptocurrency moved from low of US$32,437.09 to hit an intraday high of US$37,609.46, registering a growth of 15.75%. Paring some losses, the world’s largest cryptocurrency was trading around US$37,343, up 12.7%, at the time of reporting.

In a similar trend, Ether, the second-largest crypto, trades higher by 4% at US$2,587.76, and XRP surges 5.5% to 91.49 US cents. The meme currency, Dogecoin, also trades higher by 5.87% to 33.93 US cents.

The decision of El Salvador’s government to adopt Bitcoin as a legal tender has lifted market sentiment, which was dampened by China’s continued pressure to tighten its regulation of cryptocurrencies. China’s Qinghai province, the coal-based crypto mining hub, has imposed a ban on virtual currency mining operations, as per a government order issued on Wednesday.

Also Read: Will China’s Crackdown On Bitcoin Mining Start An Exodus?

The crypto markets have witnessed a surge in selling in recent past amid a slew of negative developments. The market sentiments were dented after the US Federal officials recovered the US$2.3 million in Bitcoin that Colonial Pipeline paid to a criminal outfit after a ransomware attack. Besides, the concerns about the US Federal Reserve tapering economic stimulus following the improvement in economic situation also caused short-term jitters in the market.

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