China’s regulatory actions toward Bitcoin mining have opened the door for other countries — such as the United States — to garner a significantly stronger foothold in the competitive industry. On June 8, the Republic of El Salvador made history by becoming the first nation to pass legislation to make BTC legal tender. Just days later, he introduced the bitcoin law to the nation’s legislature. Moreover, facing a question during the Twitter Spaces conversation about whether the government had considered supporting BTC mining, Bukele revealed the nation’s untapped, surplus geothermal energy reserves could be contributed from the 20 potentially active volcanoes. He then seemingly constructed a plan on the spot for how such renewable energy sources could be harnessed.
In this OKEx insight in-depth examination, the Bitcoin Law is placed under the spotlight and the authors delve into the context surrounding El Salvador's bold move while assessing its motives and the policy's potential benefits. Kindly attribute it to .
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El Salvador's Bitcoin Law
According to Rick Delaney, senior analyst at OKEx Insights:
- The Bitcoin Law's passing is clearly a landmark moment for the foremost cryptocurrency.
- However, the law's wording has some doubting whether the move is aligned with the values Bitcoiners typically espouse. In particular, Article 7 of the law mandates BTC acceptance for payments — something not typical of legal tender legislation.
- The international community has expressed concerns over El Salvador's future ability to conform to global anti-money laundering standards.
- Remittance payments in El Salvador are highly important, and with estimated savings ranging between 10% and 50% of the total sent, the Human Rights Foundation's CSO argues that widespread BTC adoption for such international payments would have a great impact on the lives of some of the nation's poorest citizens, telling OKEx Insights:"The second piece, obviously, is that they are 22% reliant on remittances from a perspective of GDP; so they stand to save a huge amount of money for the country by shifting to a system that has lower fees — and by using Bitcoin as a payment network, they can do that."