BTC has officially become the legal tender of El Salvador.

ZB Academy
3 min readSep 8, 2021

On September 8, the “bitcoin act” of El Salvador officially came into force on September 7, Beijing time and El Salvador time, and bitcoin officially became the legal currency of El Salvador. At present, bitcoin and US dollar are used as legal tender of El Salvador at the same time. Residents of the country can download the government’s digital wallet for free, and the downloader will receive bitcoin worth $30 in the setting process. President Nayib Bukele of El Salvador tweeted that El Salvador purchased the first 200 bitcoins on the day the bill came into force.

ZB Institute believes that although El Salvador is still excluded by the world monetary organization due to the legalization of bitcoin, the indisputable fact is that bitcoin has taken the first step of legalization. Today’s global economy should not only reconsider the legal transaction of bitcoin, but also conduct more rigorous demonstration and thinking compared with the legalization of bitcoin.

The official entry into force of the bitcoin act of El Salvador will also drive the trading and investment of global cryptocurrencies. According to the statistics of ZB Research Institute, at present, ARK Trading Fund (ETF) now holds 8659237 shares of bitcoin trust (GBTC) fund, with a value of USD 338316390. ARKW’s investment in GBTC accounts for 5.72% of the total value of the fund. ARKW‘s GBTC investment is now the second largest investment in its portfolio after electric vehicle manufacturer Tesla.

On September 8, Vitalik Buterin, founder of Ethereum, proposed the idea of transferring NFT in the whole two-tier ecology. Some analysts believe that this is Vitalik Buterin’s measure to limit the further development of Ethereum in order to solve the current rise of Ethereum gas fee. According to the statistics of ZB Research Institute, on Monday, Ethereum layer 2 protocol processed about 250000 transactions, which has exceeded the number of transactions in bitcoin network by 210000.

According to the statistics of ZB Research Institute, Ethereum has destroyed 220300 ETH, and the average destruction amount of a single block is 10453 ETH. The destruction amount in recent week will reach 78000 ETH, and the total destruction amount will be close to 300000 ETH. With the further destruction of Ethereum, the high transaction cost will inevitably limit its further development.

On September 8, the world economic forum recently released a report that four factors have promoted the global wave of cryptocurrency adoption. Central bank policies, hyperinflation and macroeconomic instability lead to the fluctuation and depreciation of legal tender relative to other global currencies.The cost of remittances in traditional payment systems is too high, 6.8% globally, and nearly 9% in sub-Saharan Africa. This may be the reason for the increase in P2P cryptocurrency transfers. With the invention and rapid expansion of stablecoins, they can serve as a frictionless transaction medium between cryptocurrency and legal currency. The different applications provided by various digital assets, coupled with the industry’s efforts to become more environmentally friendly and consume less energy, have prompted people to turn to the encrypted market.

On September 8, it was reported that Gabriel Silva, a member of the Panamanian Congress, proposed a bill to regulate the use of cryptocurrencies across the country. According to relevant information obtained by the ZB Research Institute, the bill also recommends that individuals in Panama or set up in the country Of legal entities can freely agree to use cryptocurrency as a means of payment for any civil or commercial activities that are not prohibited by the legal system.

On September 8, payment giant Visa plans to develop applications (APIs) to connect traditional banks with encryption products. Users can invest in cryptocurrencies and ETFs directly through the banking platform without middlemen. Visa also announced that it is working with several national institutions to issue encrypted currency cards, which users can bind to bank accounts.



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