BITCOIN IS LEGAL TENDER IN EL SALVADOR. WHAT DOES IT MEAN FOR THE BROADER CRYPTO MARKET? SOME BULLS THINK 'IT COULD BE HUGE'

GLOBAL- Bitcoin is now officially legal tender in El Salvador, a country in Central America with a population of 6.5 million and a gross domestic product of about $27 billion, as of 2019.It is a country about the same size as the state of New Jersey, but the move by San Salvador’s legislative body early Wednesday to make bitcoin BTCUSD legitimate is making waves in the broader crypto complex.

Bitcoin being classified as legal tender in El Salvador means that everyday Salvadorans can easily make cross border payments without having to rely on the U.S. dollar DXY , wrote Ross Middleton, chief financial officer of DeversiFi, a decentralized finance business.

Bitcoin’s legalization in the country, championed by 39-year-old President Nayib Bukele, means that it can be used to pay taxes, services at all businesses, except those unable to process such transactions. Middleton believes it could lead to crypto native companies setting up within the country now that the banking relationship will be easier. 

That said, Presearch’s Pape cautioned that legal designation of bitcoin in El Salvador could also create more turbulence within the crypto complex. “It feels like there’s a showdown brewing, and announcements like this could paint a large target on Bitcoin that could cause some short-term pain for the crypto space,” Pape wrote. He said that US regulators may feel compelled to “ensure that bitcoin isn’t used by nation-states whose interests run counter to those of the U.S.”

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