El Salvador is the first country in the world to recognize Bitcoin as a legal tender. Despite opposition from local groups, the government believes the cryptocurrency will be a net positive for the economy and society.
Salvadoran president, Nayib Bukele, confirmed on Monday that his government had bought its first 200 bitcoin (BTC) ahead of Tuesday’s introduction of a new law designed to makecryptocurrency a legal tender.
“Our brokers will be buying much more as the deadline approaches,” Bukele said, referring to the timetable for fully implementing the new BTC legislation on Tuesday, September 7.
The purchase is part of a new $ 150 million Bitcoin fund that was donated last week by the Salvadoran Congress. The fund will be used to facilitate conversion from BTC to US dollars in preparation for the new law. At current prices, the purchase of BTC was worth just over $ 10.36 million.
In June of this year, El Salvador became the first country in the world to recognize Bitcoin as legal tender. While the decision was praised by the Bitcoin community, critics from the World Bank and International Monetary Fund warned that the new strategy was not a good idea.
Bank of America, meanwhile, recently unveiled at least four potential benefits to El Salvador from adopting Bitcoin. In a report released in July, the bank said adopting BTC could improve remittances, promote financial digitization, provide more choice to consumers, and open the country to foreign investors.
The new Bitcoin law gives Salvadorans the ability to hold digital assets as part of a long-term investment strategy or withdraw them in cash at any of the 200 ATMs installed nationwide. The country is also building the infrastructure to support a state-owned Bitcoin wallet, named Chivo. Chivo wallet will have its own ATM which will allow citizens to withdraw cash 24 hours a day without paying commission.
09/08/2021, Mr Advice TEAM