El Salvador has officially adopted bitcoin as legal tender, and draft legislation may soon lead Panama down the same path. China, the US and the UK are also investigating launching their own cryptocurrencies. Here’s what you need to know.

Why are countries adopting bitcoin?

President Nayib Bukele hopes bitcoin will alleviate El Salvador’s prickliest economic problems; citizens sending money home from abroad account for up to a fifth of the country’s GDP, which incurs high transaction costs, and 70 per cent of people have no bank account. Bitcoin enables quick, cheap payments across borders, and doesn’t require banks.