El Salvador Becomes the World's First Country to Adopt Bitcoin as Legal Tender | Fed (Kind Of) Buys Crypto Bonds

High Level

This Wednesday, June 9th, the legislative assembly of El Salvador made history for formally adopting bitcoin as legal tender
With 62 votes in favor, nearly three-fourths of the legislature, this new law holds potential to elevate El Salvador into one of the world’s most important financial centers

Nayib Bukele 🇸🇻 @nayibbukele

Welcome to the future 🇸🇻 #Bitcoin

Drilling Down Deeper

At around 1 AM Central Time on June 9th, the Salvadoran President Nayib Bukele tweeted, “History!”

Nayib Bukele 🇸🇻 @nayibbukele

The Land of the Free 🇸🇻

How It Started…
On the morning of June 5th, the last day of the Bitcoin 2021 conference in Miami, there was a special announcement that Jack Mallers would surprise the audience with a special message dubbed, “One Small Step for Bitcoin, One Giant Leap for Man Kind.” The attendees as well as audience around the world waited and watched eagerly for the young entrepreneur and developer from Chicago, Illinois to take the stage and make one of the biggest announcements in Bitcoin’s history. Maller’s presentation did not disappoint, and by the end of his speech he had everyone in tears almost as he introduced the president of El Salvador for his grand plan of making bitcoin legal tender and finished by walking off the stage to embrace both of his parents with a hug. It was a beautiful moment.

Documenting Bitcoin 📄 @DocumentingBTC

The world may seem dark. But there is a small, orange spark of hope if you look closely enough. That's all it takes to start a fire. El Salvador 🇸🇻 and #Bitcoin

A Spark of Hope…
By Sunday, the president of the Republic of The Savior had the taken the crypto and financial news headlines by storm. That next night, he took to Twitter talking about their move into bitcoin that spilled over into the early hours of the next morning. Bukele spoke about the recently announced Bitcoin Law in the hour leading up to its vote as well as plans around bitcoin mining and expanding infrastructure and stimulating development around the country’s source of geothermal energy (here’s the recording). Speaking of how using cheap, clean, renewable energy that the country loses in large amounts to oversupply or through transporting it to cities, using it instead for bitcoin mining positions El Salvador as an ideal location for operations from both an environmental and regulatory stance.

Nayib Bukele 🇸🇻 @nayibbukele

I’ve just sent the #BitcoinLaw to Congress 🇸🇻

Bitcoin Bill to the Future
By Tuesday, it was clear that in El Salvador there would be no capital gains tax for Bitcoin in the articles of the bill since it will be recognized as a legal currency. The Bitcoin Bill proposal was simple, short, and sweet. The Bitcoin Law was sent to Congress by their president around 9PM Central Time on June 8th, and it was approved at 1:05AM Central Time in the Salvadoran Congress by a supermajority of 62 out of 84 votes. Over a span of four days in El Salvador, it became the bitcoin capitol of the world beginning with Nayib Bukele announcing BTC adoption, a simple three-page bill that he sent to Congress, the government votes to approve the bill, and then President Bukele joining Twitter to speak candidly about the entire situation. On Nic Carter’s Twitter Spaces, Bukele welcomed the idea of bitcoin mining via excess volcanic geothermal energy!

Asamblea Legislativa @AsambleaSV

Con 62 votos, el pleno legislativo aprueba la #LeyBitcoin con la que El Salvador adopta el #Bitcoin como moneda de circulación legal. ¡#LaNuevaAsamblea sigue haciendo historia!

Volcano Money > Oil Money
Upon its passage, El Salvador’s Congress broke into applause after the bill was signed into law by the president to officially pass it. This move by El Salvador will be powerful in bringing economic and financial benefits to the nation, not to mention, makes it one of the most ambitious countries in adopting bitcoin as legal tender while embracing clean mining, the Lightning Network, and Maller’s Strike app for payments and remittances. Amazingly, these major developments came after recent aspersions against bitcoin by ESG fan-boys and fan-girls claiming ignorantly that bitcoin mining would consume too much energy while also using too many dirty sources in the process. There could not have been better timing for this news proving why bitcoin works for the billions, not billionaires, and proving how it can be mined using carbon neutral or even negative methods!

Nayib Bukele 🇸🇻 @nayibbukele

I’ve just instructed the president of @LaGeoSV (our state-owned geothermal electric company), to put up a plan to offer facilities for #Bitcoin mining with very cheap, 100% clean, 100% renewable, 0 emissions energy from our volcanos 🌋 This is going to evolve fast! 🇸🇻

How It’s Going…
The news of El Salvador’s decision only got better over time. It was especially rich seeing the Reuters headline saying, “IMF sees legal, economic issues with El Salvador’s bitcoin move.” That led many in the bitcoin and traditional financial communities wondering, “Risk to who?” The only plausible risk that popped into mind for many of us was that if El Salvador follows through on its prospects in adding bitcoin to their national reserves, it could mean that if the price of bitcoin went parabolic that they may be able to pay off the loans made to them by the IMF. While the IMF can issue their own SDR’s (special drawing rights) that are tied to a basket of fiat currencies that they can always just be inflated and printed more of, the truth is they cannot compete that against a fixed and sound money like bitcoin unless they too started to recognize it as legal tender and joined in on the movement.

Bitcoin is run by rules, not rulers. Without them, we would live with the animals.

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