El Salvador's President Nayib Bukele has announced that the Central American country will be the first in the world to adopt Bitcoin as legal tender.
"In the short term, this will generate jobs and help provide financial inclusion to thousands outside the formal economy, and in the medium and long term, we hope that this small decision can help us push humanity at least a tiny bit into the right direction," he said in a recorded message played at a Bitcoin conference in Miami, Florida in the US on Sunday, adding he plans to introduce legislation next week for that purpose.
In a series of Twitter posts, the 39-year-old president, who recent polls show is backed by more than 90% of Salvadorans, said Bitcoin could help boost the economy.
"Financial inclusion is not only a moral imperative but also a way to grow the country's economy, providing access to credit, savings, investment and secure transactions," he said. "We hope that this decision will be just the beginning in providing a space where some of the leading innovators can reimagine the future of finance."
Some 70% of El Salvador's population does not have a bank account and works in the informal economy, he said, adding it would facilitate faster transfers for $6 billion of remittances a year. He did not offer much detail, however, on how Bitcoin will coexist with El Salvador's official currency, the US dollar.
Bukele also announced on Twitter that his government will give "immediate permanent residence to crypto entrepreneurs."
The idea has surprised many because although Bitcoin is legal to own in most countries, it has never been designated as legal tender.
The right-wing leader, who has been in power since 2019, has been heavily criticized for making authoritarian decisions. On May 3 this year, he fired five Supreme Court justices after the Salvadoran judiciary ruled that the president's use of emergency powers during the pandemic was unconstitutional. On Twitter, Bukele defended the firings as "getting our house in order."
