Tech

Bitcoin Rises 8.5 Percent to $36,265 as El Salvador Adopts the Cryptocurrency as Legal Tender

Bitcoin surged 8.54 percent to $36,265 (roughly Rs. 26.4 lakhs) on Wednesday, adding $2,853.31 (roughly Rs. 2 lakhs) to its previous close.

Bitcoin, the world’s biggest and best-known cryptocurrency, is up 30.8 percent from the year’s low of $27,734 (roughly Rs. 20.2 lakhs) on January 4. As of 10:12am on June 10, Bitcoin price in India stood at Rs. 26.9 lakhs.

Ether, the coin linked to the Ethereum blockchain network, rose 2.29 percent to $2,566.4 (roughly Rs. 1.9 lakhs) on Wednesday, adding $57.55 (roughly Rs. 4,200) to its previous close. As of 10:12am on June 10, Ethereum price in India stood at Rs. 1.9 lakhs.

On June 9, El Salvador became the first country in the world to formally adopt Bitcoin as legal tender after Congress approved President Nayib Bukele’s proposal to embrace the cryptocurrency.

With 62 out of 84 possible votes, a majority of lawmakers voted in favour of the initiative to create a law that will formally adopt Bitcoin, despite concern about the potential impact on El Salvador’s programme with the International Monetary Fund.

Bukele has touted the use of Bitcoin for its potential to help Salvadorans living abroad to send remittances back home, while saying the US dollar will also continue as legal tender.

“It will bring financial inclusion, investment, tourism, innovation, and economic development for our country,” Bukele said in a tweet shortly before the vote in Congress, which is controlled by his party and allies.

He added that the use of Bitcoin, whose use will be optional, would not bring risks to users. Its use as legal tender will go into law in 90 days.

“The government will guarantee the convertibility to the exact value in dollars at the moment of each transaction,” Bukele said.

El Salvador’s dollarised economy relies heavily on money sent back from workers abroad. World Bank data showed remittances to the country made up nearly $6 billion (roughly Rs. 43,790 crores) or around a fifth of GDP in 2019, one of the highest ratios in the world.

© Thomson Reuters 2021

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