In September this year Nayib Bukele, President of El Salvador declared Bitcoin a legal tender. Crypto space is growing across the world with great speed. President Bukele made predictions that time of fiat currencies will soon end.
What is Fiat Currency?
Fiat Currency is a centralized currency that has control of a government. Fiat money gives power to central banks huge control over economy because they can control how much money is printed. Most of the currencies are fiat currencies like Indian Rupee, US Dollar.
‘Real Revolution’ in El Salvador
Nayib Bukele believes that El Salvador has brought ‘real revolution’ by legalizing Bitcoin as a currency.
Some people of El Salvador are against President’s move. International organizations have also called the move ‘risky’. In response, Nayib tweeted,
“What has been called by international organizations as “The Bitcoin Experiment” is nothing more than the world watching how mass adoption changes a country’s economy. If its for the good, its game over for FIAT. El Salvador is the spark that ignites the real revolution.”
International Monetary Fund warned El Salvador to stop using Bitcoin as a legal currency. The reason that IMF stated was high price volatility. The organization also pointed to risk factors like Financial Integrity, Financial Stability and Consumer Protection.
Vladimir Putin criticized crypto space citing it volatile and risky.
India also showed a disinterest towards crypto currency. Indian government expressed in Parliament that it has no plans for boosting crypto space in the country.
El Salvador established Bitcoin ATMs and also created a Bitcoin wallet Chivo.
President Nayib Bukele revealed his plans to build Bitcoin City near Conchagua Volcano. The move will help in Bitcoin mining using renewable energy.
Mining of crypto currency requires power and environmentalists have raised concerns regarding footprints that it will leave on environment.
El Salvador currently has 1500 Bitcoins in its reserve which has a value of nearly $ 76,417,935 (Rs 574 crore).