El Salvador has become the first country to make Bitcoin legal tender after a majority of lawmakers approved the request from El Salvador’s President, Nayib Bukele. The U.S. dollar is also currently used in El Salvador.
Despite Bitcoin being made legal tender, which allows for people to use it to pay debts, it does not mean businesses or even individual citizens must use it. “Because it is so volatile, I think Bitcoin as a usable currency will not happen here even though it can now legally be done,” said Daniel Ortiz, a former financial analyst for Banco Agrícola. “Simple Tweets by Elon Musk alone can cause cryptocurrencies to rise and crash suddenly making them not at all stable.” Bitcoin has lost nearly half of its value so far this year, down from over $60,000 to just about $30,000 currently.
In May, Federal Reserve Chairman Jerome Powell said the Federal Reserve would put out a paper that shows the bank’s view on the risks or benefits on making the U.S. dollar digital.