El Salvador’s parliament has approved a law introducing bitcoin into commodity circulation

As expected, El Salvador’s parliament voted on June 9 to approve the head of state’s law, which introduces bitcoin alongside the functioning U.S. dollar as a means of payment in that country. Indeed, although El Salvador has its own currency, the population and businesses are actively using U.S. dollars due to the strong devaluation.

Now an innovation is being introduced, which will take effect 90 days after the publication of the new law in the official press. The new document prescribes that retailers and wholesalers of goods in El Salvador must accept bitcoins for payment if the buyer so chooses.

El Salvador’s President Nayib Buquele said, however, that the local population does not have to assume all the risks that come with owning bitcoins. To that end, he instructed the country’s government to create a $150 million trust that would open up the possibility for Salvadoran citizens to convert bitcoins into U.S. dollars if they are more comfortable keeping their funds in U.S. currency.

Buquele also stressed that El Salvador is not abandoning the circulation of U.S. dollars in its country and does not see bitcoins as a potential financial instrument to replace the U.S. currency in that capacity. However, he said that foreign nationals who are willing to invest at least three bitcoins in El Salvador’s economy can expect to receive residency in the country.

The head of El Salvador also launched a new initiative, announcing it on his social network Twitter page:

“I have just instructed the president of our state-owned geothermal energy company to develop a plan to provide their bitcoin mining capacity using very cheap, 100% clean, 100% renewable energy that can be derived from our volcanoes. I’m sure we’ll move in that direction very quickly!”

At the end of June 9, bitcoin was up 10% in daily movement, to $36,14k, fixed at the beginning of June 10.