Salvador Melendez / AP
SAN SALVADOR, El Salvador (AP) – El Salvador President Nayib Bukele announced in a recorded message played at a Bitcoin conference in Miami on Saturday that he would send a bill to the country’s congress next week that would make cryptocurrency a legal tender in Central America.
The 39-year-old president, who kept approval ratings above 90% and made Twitter his favorite way to communicate, characterized it as an idea that could help El Salvador move forward.
“Next week, I will send Congress a law that will make Bitcoin a legal tender in El Salvador,” Bukele said. “In the short term, it will create jobs and help provide financial inclusion to thousands outside the formal economy, and in the medium and long term, we hope this small decision will help us push humanity at least a little bit in the right direction.”
The US dollar is the official currency of El Salvador. About a quarter of El Salvador’s citizens live in the United States, and last year, despite the pandemic, they sent home more than $ 6 billion in remittances.
Bukele’s New Ideas party has a majority in the new congress to be held on May 1, giving any legislative proposal by the president a high probability of adoption.
Bukele sees Bitcoin as a quick way to transfer billions of remittances
Additional details of the plan have not been released. But Bukele noted in subsequent Twitter messages that Bitcoin could be “the fastest-growing way to transfer $ 6 billion a year in remittances.” He said much of those cash transfers are currently lost to middlemen, and Bitcoin could benefit more than a million low-income families.
He also said that 70% of El Salvador’s population does not have a bank account and works in the informal economy. Bitcoin could improve financial inclusion, he said.
Driving his high popularity and his party’s dominance in the February 28 elections, Bukele concentrated power. A majority of his party’s congressional assembly ousted judges of the Constitutional Court of the Supreme Court on May 1st. They then replaced the attorney general.
They criticized some of Bukele’s more drastic measures during the pandemic, including the mandatory stay and detention at home where those caught breaking the rules were detained.
The president has strained relations with the Biden administration
Although he enjoyed a positive relationship with former U.S. President Donald Trump, Bukele had a much more tense relationship with the administration of President Joe Biden.
Last month, White House Special Envoy for the Northern Triangle Ricardo Zúñiga said during a visit to El Salvador that the U.S. government would like El Salvador to reverse moves against the court and the attorney general. Bukele said that would not happen.
Bukele’s concentration of power, attacks on critics, and open contempt for checks on his power have raised concerns about Salvador’s path. However, Bukele has a broad base of support in part because of the ultimate failure of the country’s traditional parties that have ruled over the past 30 years to improve people’s lives and their ability to provide short-term benefits.
Bukele was praised for aggressively obtaining COVID-19 vaccines and running an effective vaccination program far more successful than El Salvador’s neighbors.