Three El Salvadorian government ministries are discussing whether they should allow firms in the country to pay salaries in Bitcoin (BTC/USD). A report unveiled this news on June 15, citing El Salvador’s minister of Labour and Social Welfare, Rolando Castro. The government is analyzing how it can enforce this change as soon as BTC starts getting used as legal tender.
According to the report, the three ministries involved in these discussions are the Ministry of Economy, the Ministry of Finance, and the Ministry of Labor and Social Welfare. However, the El Salvadorian government has provided scarce information about this new project. Nonetheless, it remains a mystery how companies in the country will be able to circumvent the intrinsic volatility of BTC. Providing a possible solution to this problem, Changpeng Zhao, Binance’s CEO, said the employers can convert their holdings into stablecoins.
— CZ 🔶 Binance (@cz_binance) June 15, 2021
By integrating BTC salaries, El Salvador will have to change its 2001 Monetary Integration Law, which states that all salaries are payable in dollars. This law came into effect during Francisco Flores’ administration, where El Salvador replaced its colón with the greenback.
Striving to become a BTC hub
This news comes after El Salvador made headlines in the past week after Congress approved President Nayib Bukele’s proposal to accept BTC as legal tender. Reportedly, the bill got 62 out of 84 votes in Congress despite mounting concerns about the potential impact on the country’s program with the International Monetary Fund (IMF). In so doing, El Salvador became the first-ever country to adopt BTC as legal tender.
Touting BTC, President Bukele said the leading cryptocurrency by market capitalization would help El Salvadorians living abroad send remittances back home seamlessly. While the country will still use the US dollar as legal tender, Bukele was overly bullish on BTC, saying it would introduce financial inclusion, investment, tourism, innovation, and economic development into the country.
To avoid the increasing criticism on BTC’s energy consumption, President Bukele directed LaGeo, a state-owned geothermal electric company, to come up with a plan to offer Bitcoin mining facilities by leveraging energy from volcanoes in the country. In so doing, President Bukele said the country would easily build a BTC mining hub powered by geothermal power.
Looking to attract BTC enthusiasts into the country, President Bukele said El Salvador would offer citizenship to anyone that can prove they have invested in at least three BTC. Per the president, the use of BTC as legal tender is set to start in less than three months.
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