Lawmakers have approved a law classifying Bitcoin as legal tender, making El Salvador the first nation to officially adopt a cryptocurrency.
El Salvador became the first country in the world to officially adopt Bitcoin as legal tender on Wednesday, according to a tweet from the president's communication secretary.
Congress passed the "Bitcoin Law" with 62 votes, the tweet confirmed, finalizing the process to make the cryptocurrency legal in the small Central American country.
In another tweet, President Nayib Bukele celebrated the passing of the law as a moment of "History!"
Bukele was able to get the law passed with the help of his allies in Congress. Opposition parties, which had criticized the speed of the vote, did not back the legislation, AFP reported.
What is the outlook for El Salvador's new currency?
The president announced that his country would adopt the cryptocurrency during a Bitcoin conference on Saturday. He sees the move as a way of encouraging foreign investment in El Salvador, saying at the time that if just 1% of the world's Bitcoin were to be invested in the country, "that would increase our GDP by 25%."
El Salvador is a low-income country that relies on remittances from abroad. It is hoped that the adoption of the blockchain currency will ease and reduce the costs of those transfers. The country also uses US dollars as an official currency.
The rollout would be handled by the mobile payments app Strike, which recently debuted in El Salvador. Bukele said that the majority of people in the country do not have traditional bank accounts and that the new law will enable people to create online digital wallets with just a smartphone.
However, the cryptocurrency's value remains volatile. This makes it unsuitable as legal tender people can rely on to pay for necessities like food and rent. The value of Bitcoin has fallen by more than $25,000 (€20,500)since hitting highs of nearly $65,000 earlier this year.