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Bitcoin Is Officially The National Currency Of El Salvador Today

Bitcoin Is Officially The National Currency Of El Salvador Today

On September 7, all eyes will therefore be on El Salvador and the entry into force of Bitcoin, which is the first country to adopt a cryptocurrency as its official currency. An approach that is not unanimous even if all means have been implemented by President Bukele to make this world premiere a success. Here is all you need to know.

Since last June, the President of Salvador Nayib Bukele has been making the headlines in Bitcoin. Indeed, El Salvador is the first country to adopt the Bitcoin cryptocurrency as the official national currency. The “Bitcoin” law, making this announcement a reality, will come into force in just a few days: on September 7th. 

Bitcoin  El Salvador National Currency

A communication campaign to promote Bitcoin

El Salvador, a country on the South American continent, has thus become the first nation to issue an advertising video promoting Bitcoin. This advertisement shows in particular that Bitcoin can be used to operate financial transfers like what Salvadorans used to do with the US dollar, the historic national currency of the country which will retain its title alongside Bitcoin. In order to promote the adoption of cryptocurrency in the country, the government has decided to offer $ 30 in Bitcoin to any citizen when they download their Bitcoin wallet. The country has also created its own national wallet called "Chivo". This wallet is compatible with all existing bitcoin wallets.

The President of El Salvador, Nayib Bukele, promotes Bitcoin, which becomes the official currency, through an advertisement.

Finally, to make Bitcoin accessible to everyone in the country, more than 200 Bitcoin distributors stamped with the “Chivo” logo have been installed in the country. These distributors allow the population to exchange their dollars for Bitcoin. More than fifty banks are partners in order to facilitate exchanges between fiat currency and Bitcoin. In addition, the country has confirmed the establishment of a fund of 150 million dollars to guarantee convertibility between Bitcoin and the dollar, the two national currencies of El Salvador from September 7.

The arrival of Bitcoin is debated in El Salvador

It was first of all the international monetary fund that alerted other countries tempted to follow in El Salvador's footsteps in its march towards Bitcoin. Indeed, according to the IMF, the risks and costs associated with the use of Bitcoin have been largely underestimated. A fear that echoed among the people of El Salvador. Several of them gathered in the streets to protest against the adoption of Bitcoin as a local currency.

A blue ray at eye level on the Salvadoran president's Twitter profile photo to symbolize the adoption of Bitcoin as legal tender.

A blue ray at eye level on the Salvadoran president's Twitter profile photo to symbolize the adoption of Bitcoin as legal tender.

The fears of the few hundred people who demonstrated are linked to the high volatility of the cryptocurrency. Indeed, they fear that the poorly educated population is not aware of the risks of volatility linked to Bitcoin and that this therefore creates losses of several years of savings for Salvadorans.

Facing criticism, the young head of government replied that residents of El Salvador will not be forced to use Bitcoin and that the dollar will also remain in force alongside cryptocurrency. President Nayib Bukele believes in particular in this Bitcoin movement to, on the one hand reduce the costs associated with cross-border payments which represent 20% of the country's GDP, but also to attract foreigners wishing to visit a country in which Bitcoin will be accepted. in all shops.

Here is the first country to use bitcoin as a currency

The President of El Salvador has announced that bitcoin will soon be able to be used as legal tender throughout the country. One way to reduce the influence of the dollar and which could well spread to neighboring countries.

It was Nayib Bukele, the President of El Salvador who announced it himself: the use of bitcoin as legal tender will soon be possible on the territory of the country. This is the first time that a Latin American country formalizes the adoption of a cryptocurrency in the same way as the dollar which remains the fiat currency of the country.

With bitcoin, the president intends to improve the standard of living of families with low incomes when about 30% of the inhabitants do not have a bank account. And the power in place relies mainly on international transfers of bitcoins from expatriates to achieve this. With the advantage, the absence of withdrawals made by intermediaries and a stratospheric bitcoin value. It should be noted that these Salvadoran emigrants contribute more than 20% of the country's GDP. As a first step, the state will inject $ 150 million to facilitate the acquisition of bitcoins.

The National Assembly has just voted for the use of bitcoin as a local currency in El Salvador.

El Salvador buys first 200 BTC, confirms President Bukele

Salvadoran President Nayib Bukele confirmed on Monday that his government had purchased its first 200 Bitcoin (BTC) before the September 7 rollout of a new law to make cryptocurrency legal tender.
“Our brokers will buy a lot more as the deadline approaches,” Bukele noted, referring to the September 7 timeline for full implementation of the new BTC legislation.

The purchase is part of a new $ 150 million Bitcoin fund passed last week by Congress in El Salvador. The fund will be used to facilitate conversions from BTC to US dollars before the new law is implemented. 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 move was hailed by the Bitcoin community, critics from the World Bank and the International Monetary Fund have warned that the new strategy is not a good idea. More recently, internal opposition, especially among retirees, has seen hundreds of people across the country protest the new Bitcoin law.

Recent: President of El Salvador announces infrastructure is already under construction before the country adopts Bitcoin

Perhaps surprisingly, Bank of America recently outlined at least four potential benefits for El Salvador accepting Bitcoin. In a report released in July, the bank said the country’s adoption of BTC could streamline remittances, promote financial digitization, provide more choice for consumers and open up the country to foreign investors.
The new Bitcoin law gives Salvadorans the option of holding Bitcoin as part of a long-term investment strategy or withdrawing it in cash at any of the 200 ATMs set up across the country. The country is also building an infrastructure to support a state-issued Bitcoin wallet called Chivo. The Chivo wallet will have its own ATM that will allow citizens to withdraw money 24 hours a day without paying commissions.

Bitcoin to challenge the US dollar

This decision is also a political coup to show the country's mistrust of American influence and in particular its dollar, whose variations strongly affect El Salvador as well as other Latin American countries, such as Panama. or Ecuador. The president, with an authoritarian temperament, also underlined his intentions with a tweet signing a certain form of mistrust towards the great American neighbor. Nayid Bukele also modified his profile picture by adding a kind of bluish ray at eye level. A symbol that spreads with a red variant on the profiles of the supporters of this initiative.

El Salvador is not the first country in the to bet on a cryptocurrency to strengthen its autonomy vis-à-vis the dollar. This is also the case with Venezuela, where President Maduro launched a local cryptocurrency called petro, which is indexed to oil. In any case, this decision will certainly trigger a craze towards cryptocurrencies in this zone since countries like Argentina, Paraguay or Panama are supporting this initiative with more tweets.