Bitcoin remittances to El Salvador increased more than four times in May compared to the previous year, according to data from blockchain analytics firm Chainalysis. Last week, El Salvador passed a bill making bitcoin legal tender in the country with the US dollar.
- Citing data from blockchain analytics firm Chainalysis, Reuters reported that monthly bitcoin transfers of less than $1,000 in El Salvador totaled $1.7 million in May, representing an increase of more than 300% from last year’s $424,000. Monthly bitcoin transfers in the country reached $2.5 million in March.
- While remittances using bitcoin have increased, they still constitute a small fraction of total remittances in the country. According to the World Bank, remittances using traditional money amounted to nearly $6 billion in 2019, and about 95% of total remittances in the first quarter of this year came from Salvadorans working in the US.
- El Salvador became the first country in the world to make bitcoin legal tender when its congress Passed President Nayib Bukele’s bitcoin bill last week. The country is now focusing on bitcoin mining energy from volcanoes, which aims to be “Very Cheap, 100% Clean, 100% Renewable” and with “0 Emissions”.
- Several organizations have expressed concern over El Salvador’s move to make bitcoin legal tender, including the International Monetary Fund (IMF), which has issued a legal and economic warning to the country. issues Last week.
- Rating agency Moody’s said last week that El Salvador’s bitcoin law “raises risks to the financial system, indicating the stability of the country’s monetary system and the lack of a coherent economic framework.”
- Meanwhile, a Bank of International Settlement (BIS) official called the bitcoin law in El Salvador “interesting experimentBut said it did not change the bank’s approach to cryptocurrencies. European Central Bank (ECB) President Christine Lagarde similarly stated that the ECB’s policy is unaffected By the bitcoin law of El Salvador.
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