Journalist
Posted:
- El Salvador has passed new laws to encourage BTC adoption.
- The price of BTC remained the same while the MVRV ratios continued to grow.
El Salvador’s Congress has passed a migration law that will allow accelerated 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 December 20, El Salvador’s unicameral legislature approved a reform, with support from President Nayib Bukele’s New Ideas party, which controls Congress.
The law will come into effect in the coming days. Bukele, who is seeking re-election in February, justifies the reform by emphasizing the “vital importance” of his development projects.
The reform exempts eligible individuals from the standard naturalization requirement of five years of permanent residence, reducing this to two years for those with a Salvadoran spouse.
Despite becoming a national currency in 2021, Bitcoin adoption in El Salvador has been gradual.
The finer details
Some cryptocurrency advocates have moved to the country.
El Salvador is currently negotiating a new financing program with the International Monetary Fund to address its economic challenges, following IMF concerns about the country’s slow economic growth and the risks associated with Bitcoin adoption.
El Salvador’s decision to offer accelerated citizenship in exchange for Bitcoin donations has both positive and negative consequences for BTC.
On the positive side, Bitcoin is portrayed as a tool for philanthropy, demonstrating its potential to contribute to social and economic development. This is consistent with El Salvador’s pro-Bitcoin stance.
It could improve the cryptocurrency’s reputation as a force for positive change. However, the move can also bring challenges.
Linking citizenship to Bitcoin donations introduces a controversial dimension, and the international response could impact the way Bitcoin is viewed on the world stage.
Read Bitcoin’s [BTC] Price forecast 2023-24
State of BTC
At the time of writing, BTC was trading at $44,107.91 and the price had gone up 1.01% in the last 24 hours. However, the MVRV ratio for BTC was high.
This meant that many holders of BTC were profitable. This allowed many of these holders to sell their holdings for a profit. This, in turn, could create selling pressure on the currency in the future.
Source: Santiment