- El Salvador
- first first
- El Salvador ()
The first country to accept Bitcoin as legal tender is El Salvador, whose government passed legislation making the cryptocurrency legal tender on 9 June 2021. The legislation went into effect on 7 September that same year.
Accepting Bitcoin as legal tender means that Bitcoin can be used in El Salvador to pay for goods and services as well as for state functions such as paying taxes. Bitcoin appealed to El Salvador because it makes it easier to transfer money internationally (important in a country where around 20% of GDP comes from remittances), reduces reliance on the US Dollar and potentially allows more citizens to access banking services.
The decision was strongly opposed by both the International Monetary Fund and the World Bank, which raised concerns about the volatility of Bitcoin's value, as well as the impossibility of regulating it to maintain macroeconomic stability. The anonymous nature of Bitcoin transactions mean that the country may also be at risk of falling foul of international laws designed to prevent money laundering and fraud.