Bitcoin: Can El Salvador’s new law help boost adoption
- El Salvador passed new laws to push BTC adoption.
- Price of BTC remained the same as MVRV ratios continued to grow.
El Salvador’s Congress has passed a migration law allowing expedited citizenship for foreigners who contribute Bitcoin [BTC] donations to government initiatives for social and economic development.
Adoption on the rise
In an unexpected vote on the night of 20th December, El Salvador’s single-chamber legislature passed a reform with backing from President Nayib Bukele’s New Ideas party, which holds control in Congress.
The law is set to take effect in the coming days. Bukele, seeking re-election in February, justifies the reform by emphasizing the “vital interest” of his development projects.
The reform exempts qualifying individuals from the standard naturalization requirement of five years of permanent residence, reducing it to two for those with a Salvadoran spouse.
Despite becoming a national currency in 2021, Bitcoin’s adoption in El Salvador has been gradual.
The finer details
Some cryptocurrency proponents have relocated to the country.
El Salvador is currently negotiating with the International Monetary Fund for a new financing program to address economic challenges, with concerns raised by the IMF over the country’s slow economic growth and the risks associated with Bitcoin adoption.
The decision by El Salvador to offer expedited citizenship in exchange for Bitcoin donations carries both positive and negative implications for BTC.
On the positive side, it portrays Bitcoin as a tool for philanthropy, showcasing its potential to contribute to social and economic development. This aligns with El Salvador’s pro-Bitcoin stance.
It could enhance the cryptocurrency’s reputation as a force for positive change. However, the move may also bring forth challenges.
Linking citizenship to Bitcoin donations introduces a controversial dimension, and the international response could impact how Bitcoin is perceived on the global stage.
Read Bitcoin’s [BTC] Price Prediction 2023-24
State of BTC
At press time, BTC was trading at $44,107.91 and its price had grown by 1.01% in the last 24 hours. However, the MVRV ratio for BTC, was high.
This meant that many holders of BTC were profitable. Due to this, many of these holders could sell their holdings for a profit. This in turn, may cause selling pressure on the coin going forward.