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In order to facilitate the adoption of Bitcoin as legal tender, El Salvador has purchased 400 Bitcoins. El Salvador, the first country to adopt cryptocurrency as legal tender, has become the third country in the world to purchase Bitcoin as a nation.
Nayib Bukele, El Salvador president, confirmed in a tweet on monday that it purchased its first 200 bitcoin, stating also that its brookers will be purchasing more in a bid to show its seriousness. He then confirmed another purchase of 200 BTC making it a total of 400 BTC. At the time of purchase, the bought coin was worth $10.6 million approximately.
This is in line with the nation's Legislative Assembly approval of a $150 million fund to facilitate the development of crypto infrastructure, which includes effective conversion from bitcoin to US dollars. The Bitcoin fund will be managed by the Development Bank of El Salvador (BANDESAL).
āThe purpose of this law is to financially support the alternatives that the state provides, without prejudice to private initiatives, that allow the user to carry out the automatic and instantaneous convertibility of bitcoin to the United States dollar,ā a congressional document reads in part.
From the fund, $23 million is set for the installation of cryptocurrency ATMs in different parts of El Salvador to enable its citizens to make deposits and withdrawals without extra fees charged. Presently, a total of 200 government backed ATMs have been installed all over the country.
Another $30 million will be used to encourage the adoption of the government digital wallet called āChivoā.Ā All adult citizens who choose to use this wallet are entitled to a $30 airdrop as an incentive in their wallets and will have the privilege of managing their money and earn more Bitcoin as the price surges higher.
El Salvador's journey to adopt bitcoin as a legal tender has not been a smooth one as it has faced both praise andĀ harsh criticism both internally and internationally. The most recent rebukes came from the retirees across the state protesting against the Bitcoin law and the IMF who again came out to express their reservations. This led to president Bukele clarifying that the use of Bitcoin in the country will be optional for individuals establishing that bitcoin will be a parallel currency to theĀ US dollar.
The Bank of America surprisingly in support of theĀ Bitcoin lawĀ outlinedĀ four possible benefits to El Salvador in accepting Bitcoin. The bank explained that the adoption of bitcoin will make remittances run smoothly, enhance financial digitization, give consumers more choices and bring in more foreign investors into the country.
El Salvador's adoption of Bitcoin as legal tender is one of the remarkable events in the 12 years existence of Bitcoin. Whether Bukele succeeds or fails, people will become more aware of cryptocurrencies, its benefits and the possible advantages it offers than fiat currencies. This will also open up other countries around the world who are considering the adoption of digital currencies.
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