Update (1426ET): El Salvador has become the first country in the world to adopt bitcoin as legal tender after Congress passed President Nayib Bukele's proposal to embrace cryptocurrency. With bitcoin legal tender, just as the dollar, the country has set its sights on attracting miners.
After all the clamoring about "greening" bitcoin mining, Bukele has offered miners "cheap 100% clean, 100% renewable, 0 emissions" energy. In fact, the president said the state-owned geothermal electric company LaGeo SA de CV will offer miners geothermal electricity powered from "our volcanos."
I’ve just instructed the president of @LaGeoSV (our state-owned geothermal electric company), to put up a plan to offer facilities for #Bitcoin mining with very cheap, 100% clean, 100% renewable, 0 emissions energy from our volcanos 🌋— Nayib Bukele 🇸🇻 (@nayibbukele) June 9, 2021
This is going to evolve fast! 🇸🇻 pic.twitter.com/1316DV4YwT
"If all 644 MW of the wasted geothermal energy was used, El Salvador would become one of the largest #Bitcoin miners in this hemisphere, while also being 100% renewable," said Documenting Bitcoin.
Following Elon Musk's criticism of miners who use carbon fuels and China's crackdown on mining, El Salvador could become a powerhouse for clean Bitcoin mining.
... and there's always that one person who ruins the moment:
"L o L if you think volcanoes are clean.. They emitt the worst possible toxic gasses on earth," said one person on Twitter.
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After a tempestuous day where once again the death of crypto was heralded by many, this morning has seen buyers return amid an upsized MSTR bond deal (amid very heavy demand) and El Salvador passing a bill (which we previewed here) to become the first nation to make bitcoin legal tender.
The president of El Salvador’s bill to make Bitcoin legal tender in El Salvador passed congress with a supermajority just before 6 am UTC.
As CoinTelegraph's Brian Quarmby reports, in a Twitter Spaces conversation that began just after 5 am UTC with 22,000 listeners, President Nayib Bukele said he would sign off on the historic law later tonight or first thing tomorrow.
“It goes into effect immediately,” he said, clarifying the government would allow 90 days for the infrastructure to be put into place.
He said that accepting Bitcoin would be mandatory for all businesses.
“They have to take it by law,” he said of merchants in the country.
“If you go to Mexico they have to take your pesos.”
“In the case of El Salvador Bitcoin is going to be legal tender just as the US Dollar.”
He revealed that he will be meeting with the International Monetary Fund on Thursday.
The government will also be releasing an official Bitcoin wallet (however, this will not be mandatory).
The government intends to hold $150 million equivalent of Bitcoin in a trust fund in its development bank to assume the risks of merchants.
Permanent residency will be available for those who invest 3 BTC in El Salvador.
And while El Salvador is the first country to adopt Bitcoin as official legal tender, it will not be the last, affirms the CEO of one of the world’s leading financial advisory and fintech organisations.
Nigel Green, chief executive and founder of deVere Group, notes: “El Salvador has become the first country to adopt Bitcoin as official legal tender – but it will not be the last.
“Some larger, more powerful countries are trying to quash or slow the inevitable shift to borderless, global, digital currencies.
“But this small Central American nation has embraced the biggest one of them all – Bitcoin – and recognised it as official legal tender.
"El Salvador has made history and become a true pioneer of the digital age.”
He continues: “Where El Salvador has led, we can expect other developing countries to follow.
“This is because low-income countries have long suffered because their currencies are weak and extremely vulnerable to market changes and that triggers rampant inflation.
“This is why most developing countries become reliant upon major ‘first-world’ currencies, such as the U.S. dollar, to complete transactions.
“But reliance on another country’s currency also comes with its own set of, often very costly, problems.”
A stronger U.S. dollar, for example, will weigh on emerging-market economic prospects, since developing countries have taken on so much dollar-denominated debt in the past decades.
The deVere CEO goes on to say:
“By adopting a сryptocurrency as legal tender these countries then immediately have a currency that isn’t influenced by market conditions within their own economy, nor directly from just one other country’s economy.
“Bitcoin operates on a global scale and is, as such, largely impacted by wider, global economic changes.”
In addition, cryptocurrencies could also help bolster financial inclusion for individuals and businesses in developing countries as they can circumnavigate the biases of traditional banks and other financial services providers.
Mr Green concludes:
“There will no doubt be critics – probably those based in wealthy countries – who will knock this bold move by El Salvador.
“But I believe we should welcome the forward-thinking approach to solving complex issues.”
And having bounced off $31,000, Bitcoin is now back above $35,000 - having erased all of yesterday's losses...
Ethereum is rallying but notably less than bitcoin...
The other positive catalyst was a significantly upsized MSTR bond deal ($500 million) which will be used to acquire more bitcoin...
Most importantly, and perhaps reflecting on the institutional interest in 'buying the dip', is the fact that MSTR saw $1.6 billion in offers for the deal.
Finally, we note that amid all the talk of regulatory crackdowns, the SEC's Hester Pierce has once again urged regulators to take a step back from attempting to overregulate the crypto space.
Speaking to Financial Times, Peirce, affectionately dubbed “Crypto Mom” due to her positive stance on cryptocurrencies, argued against the need for strict regulatory policies.
According to Peirce, regulators by nature often have a knee-jerk reaction to emerging market spaces, often at the expense of innovation.
The SEC commissioner warned that pursuing stricter regulatory policies eliminates the ability of market participants to carry out peer-to-peer transactions. Rather than emphasizing government regulations, Peirce advocates for industry-led regulatory activities.