On September 7, El Salvador will become the first country to make Bitcoin legal tender.
The government even went a step further in promoting the cryptocurrency’s use by giving $30 in free Bitcoins to citizens who sign up for its national digital wallet, known as “Chivo,” or “cool” in English. Foreigners who invest three bitcoins in the country – currently about $1,40,000 – will be granted residency.
Panama is considering following El Salvador’s lead.
Does making Bitcoin legal tender mean every store and merchant in El Salvador will now have to accept digital payments? If more countries do the same thing, what will this mean for consumers and businesses around the world?
As an economist who studies wealth and money, I believe that briefly explaining what legal tender is will help answer these questions.
What’s legal tender?
Legal tender refers to money – typically coins and banknotes – that must be accepted if offered in payment of a debt.
The front of…