El Salvador became the first country to recognise Bitcoin as legal tender on Tuesday, allowing it to be used in any transaction ranging from purchasing a cup of coffee to paying taxes.
The audacious proposal, which has been widely applauded by the global bitcoin community, has been met with scepticism at home and in the traditional financial world, amid fears that it could cause instability and undue risk to the Central American country’s frail economy.
Cryptocurrencies operate independently of the world’s banks due to their decentralised nature. Cryptocurrencies have been universally rejected by the mainstream economy and relegated to the status of a novelty payment option due to their fast value changes. However, in some areas, you can pay for your Subway with bitcoin, and as more businesses use cryptocurrency as a form of payment, governments around the world are taking note.
El Salvador’s President, Nayib Bukele, recently realised that adopting bitcoin an official currency would help his people, despite certain possible concerns.