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El Salvador mulls making cryptocurrency legal tender

El Salvador President Nayib Bukele says he will make the Bitcoin cryptocurrency legal tender in the country, saying that “Bitcoin will make it easier for Salvadorans living abroad to send payments home.”

If his plan is backed by congress, the Central American country would be first in the world to formally adopt the digital currency.

It would be used alongside the US dollar, El Salvador's official currency.

"In the short term, this will generate jobs and help provide financial inclusion to thousands outside the formal economy and could also boost investment to the country," Bukele said.

#Bitcoin has a market cap of $680 billion dollars and if 1% of it is invested in El Salvador, that would increase the gross domestic product (GDP).by 25%.

On the other side, #Bitcoin will have 10 million potential new users and the fastest growing way to transfer 6 billion dollars a year in remittances.

He said he would send the legislation to congress next week.

Should it pass, the move would open up financial services to the 70% of Salvadorans who do not have bank accounts, the president said.

El Salvador's economy relies heavily on remittances, or money sent home from abroad, which make up around 20% of the country's GDP.

More than two million Salvadorans live outside the country, but they continue to keep close ties to their place of birth, sending back more than $4bn (£2.9bn) each year.

Current services can charge fees for such transfers, which can take days to arrive and sometimes need to be picked up in person, according to the announcement.

"This will improve lives and the future of millions," Bukele said.

He did not give more details about how the policy would work.