El Salvador legal tender to be bitcoin

London – El Salvador is determined to push ahead with making bitcoin legal tender, a process that will bring only small risks and prove a “leap forward for humanity”, the country’s President Nayib Bukele said.

El Salvador this month became the first country to adopt bitcoin as legal tender in a move taking effect in September.

Speaking in an interview released on Wednesday, Bukele said the move would boost jobs and economic development to the Central America country.

He said he was confident the project would be a success – despite the World Bank declining to offer technical support and concerns expressed by the International Monetary Fund (IMF).

“It looks bulletproof,” he said in an hour-long interview with bitcoin podcaster Peter McCormack.

“I’m pretty sure this is going to work, not only for us but for humanity, because it is a leap forward for humanity.”

Bukele said the move would lessen El Salvador’s reliance on the US dollar, the existing legal tender.

“[We will be] at least becoming a little less dependent on the output of new dollars, and the new inflation that’s coming with those all those new dollars,” he said.

There was no plan to hold bitcoin in national reserves, though that might happen “probably in the future”, he said.

The World Bank declined to give assistance to El Salvador’s bitcoin implementation given the environmental and transparency drawbacks.

“Having the World Bank, advisors or technical support would have been nice, but we really don’t need it,” Bukele said, adding local talent was more than enough.

He acknowledged there might be some risks to the push.

“But I really do not see them as big risk.”

Analysts have voiced concerns that the bitcoin push could endanger the country’s request for an $1 billion (about R14 billion) programme to the IMF.

The fund has voiced economic and legal concerns regarding the move, though Bukele said his government had spelled out its plan and would offer more explanation if needed.