Bitcoin transfers to El Salvador surge 300% before BTC becomes legal tender

According to data from blockchain analytics firm Chainalysis, bitcoin remittances to El Salvador more than quadrupled in May from the previous year. Last week, El Salvador passed a bill that makes bitcoin legal tender in the country along with the US dollar. Monthly bitcoin transfers to El Salvador of less than $1,000 reached $1.7 million in May, representing a more than 300% increase from $424,000 a year earlier, Reuters reports, citing blockchain data. -analysis company Chainalysis. Monthly bitcoin transfers to the country reached $2.5 million in March. While Bitcoin remittances are on the rise, they make up a small fraction of the total remittances to the country. According to the World Bank, traditional money remittances totaled nearly $6 billion in 2019, and in the first quarter of this year about 95% of total remittances came from Salvadorans working in the United States. El Salvador became the first country in the world to legally tender for bitcoin when Congress approved President Nayib Bukele's bitcoin bill last week. The country is now focusing on bitcoin mining using energy from volcanoes aiming to be “very cheap, 100% clean, 100% renewable” and “zero emissions”. Several organizations, including the International Monetary Fund (IMF), which warned the country of legal and economic problems last week, have expressed concern over El Salvador's move to make bitcoin legal tender. Rating agency Moody's said last week that El Salvador's bitcoin law "poses risks to the financial system, the stability of the country's monetary regime, and points to the lack of a coherent economic framework." Meanwhile, a Bank of International Settlement (BIS) official called the bitcoin law in El Salvador an "interesting experiment" but said it didn't change the bank's approach to cryptocurrency. Christine Lagarde, head of the European Central Bank (ECB), similarly said that the policies of the ECB are not affected by El Salvador's bitcoin law. What shall we do?

Join the Discussion

  • BrokerEUR/USD
    ETX Capital 0.6pips (variable) margin: 3.33%
    Core Spreads 0.6pips (variable) margin: 3.33%
  • Back to top