El Salvador to Buy $135 Million in Bitcoins and Distribute to All, Officially Circulate on September 7

El Salvador’s president has said that the government will provide $30 in bitcoins to each citizen.

El Salvador to Buy 5 Million in Bitcoins and Distribute to All, Officially Circulate on September 7

The president of El Salvador has said that the government will provide $30 in bitcoins to every citizen. and officially adopted Bitcoin as legal tender on September 7 of this year, when there are an estimated 4.5 million adult citizens. According to this calculation, El Salvador will purchase $135 million worth of bitcoins. The number of Bitcoin users will immediately increase by 2.50% by that time.

According to a bill previously passed in El Salvador, bitcoin will officially become legal tender in the country on September 7. But until then, the country is fighting to make bitcoin popular in the country.

Last Thursday night, Salvadoran President Nayib Bukele announced in a national speech that the government will launch Chivo, a bitcoin wallet that is compatible with other cryptocurrency wallets, which means “cool” in Salvadoran slang, according to Bloomberg. But what’s more appealing to the Salvadoran public is that the government will top up $30 in bitcoin directly to any citizen who signs up for the wallet.

According to analysts, El Salvador’s move, if successful, would add 4.5 million bitcoin users worldwide, a 2.5% increase in the user base, and would create more than $100 million in buying power in the bitcoin market.

In his speech, Nayib Bukele reiterated that the use of bitcoin would help El Salvador attract investment, boost consumption and reduce the cost of remittances for millions of nationals working abroad.

When asked why the law was enacted to make Bitcoin legal tender, Nayib Bukele explained, “Bitcoin has a global market capitalization of $600 billion, and when we do this, investors and tourists with Bitcoin will come to our country, benefiting the people and economy of El Salvador.”

In response to concerns about whether bitcoin will replace the U.S. dollar, Nayib Bukele also said that will not be the case. He said that all salaries and pensions will continue to be paid in U.S. dollars and that bank accounts containing dollars will not be converted to bitcoin. Consumers can use bitcoin in Chivo to buy goods denominated in U.S. dollars. If a business wishes to be paid in U.S. dollars, Chivo can immediately convert bitcoins to U.S. dollars, which is completely optional.

Following the launch of the wallet, El Salvador will provide training to businesses on bitcoin transactions to increase Internet and cell phone penetration and encourage the use of bitcoin. Businesses that are not technically able to accept electronic payments will be excluded.

In addition, Athena Bitcoin, a U.S. bitcoin ATM manufacturer, announced that it will invest more than $1 million to install approximately 1,500 bitcoin ATMs in El Salvador, which the country’s population will be able to use to buy and sell bitcoin. Athena Bitcoin will establish an office in El Salvador and hire local employees.

A year ago, Athena Bitcoin installed the first cryptocurrency ATM at El Zonte Beach, about 49 kilometers southwest of El Salvador’s capital, San Salvador, as part of an experiment called “Bitcoin Beach” aimed at making the town the world’s first Bitcoin economy.

Potential Risks
Rating agency Fitch noted in a report that making bitcoin legal tender would increase regulatory risk for financial institutions, potentially violating international anti-money laundering and terrorist financing standards. And a hasty launch of a payment system platform would affect financial institutions’ regulatory frameworks for operational, cyber/ransomware, currency and liquidity risks.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/el-salvador-to-buy-135-million-in-bitcoins-and-distribute-to-all-officially-circulate-on-september-7/
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