Cryptocurrencies are used widely around the world despite not being legal tender in almost all countries. Multiple businesses accept currencies such as bitcoin to pay for goods and services, and there are currently more people using cryptocurrencies in the world than ever before.
Which countries use cryptocurrency as legal tender?
On June 9, 2021, El Salvador became the first country in the world to officially classify bitcoin as a legal currency.
Some financial and legal observers described the law change as a remarkable accomplishment and a game-changer.
But others raised concerns about the cryptocurrency’s volatility.
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No other country has so far given bitcoin, or any other cryptocurrency, the status of a legal tender.
In many of these countries, like the US and the UK, trading in virtual currencies is allowed.
Some like China and Russia, however, are against allowing trading in cryptocurrency.
This doesn’t mean cryptocurrencies like bitcoin are not used in other parts of the world.
Why aren’t cryptocurrencies legal tender?
Legalising Bitcoin as legal tender will mean businesses must accept bitcoin as a payment method, alongside the standard currency – such as the US dollar and pound sterling.
Cryptocurrencies are a computer-generated digital asset, and have witnessed large fluctuations in value over the years, and not quite in the same way regular currencies do.
They are also not tied to the real economy.
In April this year, bitcoin had reached its lifetime high value around $65,000, but lost the gains in a market crash the next month.
Since then it has recovered well but not enough to reach the same heights.