SAN SALVADOR (AP) — Several countries have dabbled in cryptocurrencies, but none have gone so far as El Salvador. It adopted Bitcoin as an official currency on Tuesday.
The Central American nation is betting it will spur the economy and increase money sent home by Salvadorans in the U.S. But many are unsure the plan will work as intended.
Some say it's too complicated and opaque. Others worry about the way Bitcoin values can rise and fall sharply — potentially giving recipients a windfall or a loss.
Some also doubt government claims that it will be cheaper and easier than current ways of transferring money.
Reuters reports that the wide use of Bitcoin in El Salvador could lower commission costs for billions of dollars sent to the country from abroad, but it could also fuel money laundering.
With the change, businesses in the country will accept Bitcoin alongside the U.S. dollar, which has been the nation’s official currency for 20 years and will remain legal tender, according to Reuters.