It’s official! El Salvador is now accepting the use of cryptocurrencies as legal tender. Ahead of the big day, President Nayib Bukele has announced that the country is buying 400 Bitcoins. This is his way of preparing the country for the launch.
How much is bitcoin worth?
El Salvador is making the transition on September 7, 2021. On that day, the Bitcoin price was just above the $51,000 mark. Based on this, Bitcoins with a total value of about $20 million were purchased.
What are the plans for the launch?
Analysts and crypto enthusiasts are closely watching how this move will play out and whether people will make transactions in Bitcoin. Salvadoran people have mixed feelings about the introduction of this volatile asset as a national currency.
What are the further plans?
- The bitcoin wallet Chivo will be preloaded with a $30 balance when a user with a Salvadoran passport signs up.
- Businesses will be required to accept Chivo in exchange for goods and services.
- The government of El Salvador will also accept Chivo for tax payments.
- The U.S. dollar will remain the country’s primary currency – no one will be forced to pay in Bitcoin.
- The legislature approved $150 million as a trust fund to establish the crypto system.
- The government will set up 200 kiosks where people can make deposits.
- The Chivo wallet will be free to use.
Since the news was announced in June, some concerns have arisen:
- Environmental impact of bitcoin mining for use in El Salvador.
- Potential problems with international laws against financing terrorism and combating money laundering
- Despite the president’s statements that Bitcoin would save millions of dollars in commissions on remittances, El Salvador has some of the lowest remittance costs in the world
How does this move affect Bitcoin?
The bitcoin price surged this week, reaching $52,000. On September 7, it suddenly dropped back to $47,000.
In addition, users on platforms like Twitter and Reddit discussed plans to buy $30 worth of Bitcoin per person en masse on September 7 to support “Bitcoin Day” in El Salvador.
This current upheaval in the industry could contribute to another price jump. We will monitor the further situation around the Bitcoin price in the coming days.