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El Salvador is the world’s first country to recognise Bitcoin as legal money. Despite local opposition, the government believes cryptocurrencies would be beneficial to the economy and society.
El Salvador’s president, Nayib Bukele, said Monday that his country had purchased its first 200 Bitcoin (BTC) ahead of the Sept. 7 implementation of a new law that would make the cryptocurrency legal cash.
“Our brokers will be buying a lot more as the deadline approaches,” Bukele said, referring to the Sept. 7 timetable for fully implementing the new BTC legislation.
El Salvador has just bought it’s first 200 coins.
— Nayib Bukele 🇸🇻 (@nayibbukele) September 6, 2021
The purchase is part of a new $150 million Bitcoin trust fund established by El Salvador’s Congress last week. The fund will be used to facilitate Bitcoin-to-US-dollar conversions in the run-up to the new law’s introduction. At current prices, the BTC buy was worth just over $10.36 million.
In June of this year, El Salvador became the first government in the world to recognise Bitcoin as legal tender. While the Bitcoin community praised the move, sceptics from the World Bank and the International Monetary Fund warned that the new regulation is not a good idea. More recently, internal opposition, particularly among retirees, resulted in hundreds of protests across the country against the new Bitcoin Law.
Surprisingly, Bank of America has identified at least four potential benefits to El Salvador embracing BTC. According to a July research, the country’s acceptance of BTC may speed up remittances, stimulate financial digitalisation, improve consumer choice, and open the country to global investment.
The new Bitcoin Law allows Salvadorans to keep BTC as part of a long-term investment strategy or withdraw it in cash at any of the 200 ATMs installed across the country. The country is also building infrastructure to support the Chivo, a state-issued BTC wallet. The Chivo wallet will have its own ATM, allowing citizens to withdraw cash 24 hours a day, seven days a week without paying commissions.