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A country in Central America El Salvador has become the first country to adopt bitcoin as legal tender on June 9th. This also means that U.S. dollar will not be longer being the only legal tender in El Salvador. Bitcoin will become legal tender within three month. 

The President of El Salvador, Nayib Bukele, announced that congress approved bitcoin as a legal currency, with 62 out of 84 possible votes on Twitter, and described this as a "historical moment.”

El Salvador implemented "dollarization" for resolving the economic crisis since 2001 so they don’t have their own currency. Currently, El Salvador is still extremely dependent on cash transactions and over 70% of its total population does not have bank accounts.

El Salvador's economy relies heavily on the money Salvadorans send from abroad, these remittances make up around 20% of the country's GDP. The law said that the cryptocurrency is treated as a way to increase financial inclusion and helps Salvadoreans living abroad to remit money back home quick and with cheap way. 

According to the proposed law, the exchange rate between Bitcoin and the U.S. dollar will be free market exchange rate. There will be no restriction of the exchange rate between Bitcoin and U.S. dollars, and will not force people to use Bitcoin.

The U.S. dollar is still legal tender. Both can be used alongside. All products can be priced at Bitcoin, and people can pay the tax by Bitcoin. In other words, there is no capital gains tax on transactions of Bitcoin. The government will also  implement training and mechanisms in order to promote bitcoin transactions.

So far, there is no indication shows that other countries would follow El Salvador's embrace of bitcoin. However, it’s still a historical moment, the first country in the world adopts Bitcoin as legal tender.