Bitcoin surged on Thursday, a day after El Salvador passed a law to adopt bitcoin as legal tender.
The cryptocurrency jumped more than 13% to trade above $37,000 before settling lower at $36,435.96 at about 4:48 a.m. ET, according to CoinDesk data.
On Wednesday, lawmakers in the Central American country passed a law that made bitcoin legal tender. Among other things, it means prices can now be shown in bitcoin, and tax contributions can be paid with the digital currency.
Bitcoin proponents, who have long seen the digital coin as a viable alternative to fiat currencies, welcomed El Salvador’s moves.
The country has struck a partnership with digital wallet company Strike, to build the country’s modern financial infrastructure using bitcoin technology.
Other cryptocurrencies got a lift as well, and ether and XRP were both trading higher.
Bitcoin is still significantly off of its record high of $64,829.14 that was hit in April.
Bitcoin is known for wild price swings that have prompted critics to suggest it is not suitable to be an effective currency. El Salvador’s case will be closely watched to see how bitcoin might work as a payments mechanism on a country-wide basis.