El Salvador Adopt Bitcoin as National Currency

El Salvador’s Bitcoin Law has officially come into effect three months after its parliament passed the historic vote. The Central American nation is now the first country to recognize Bitcoin (BTC) as legal tender.

Tweeting earlier in the day, El Salvador President Nayib Bukele remarked “3 minutos para hacer historia — In 3 minutes, we make history.”

However, day one of El Salvador’s Bitcoin experiment has been somewhat marred by server capacity errors suffered by the state-issued Chivo wallet. Addressing the situation, President Bukele remarked:

“For a few moments it won’t work @chivowallet, we have disconnected it while increasing the capacity of the image capture servers. The installation problems that some people had were for that reason. We prefer to correct it before reconnecting it.”

As previously reported by Cointelegraph, El Salvador has purchased 200 BTC, taking its Bitcoin holdings to 400 “coins.” The country’s parliament recently passed a $150-million Bitcoin fund to facilitate conversions from BTC to United States dollars.

Thus, more bulk Bitcoin purchases are expected, with the president even signaling intentions to ramp up the country’s BTC acquisition.

Since the vote in June, the Central American nation has enjoyed significant support from the Bitcoin community. Tuesday’s launch is expected to be commemorated with a solidarity $30 BTC purchase from several Bitcoin proponents in Latin America and worldwide.

Bitcoin personalities such as MicroStrategy CEO Michael Saylor and Human Rights Foundation chief strategy officer Alex Gladstein have thrown their weight behind the plan.

Konstantin Anissimov, executive director of crypto exchange CEX.IO, told Cointelegraph that El Salvador’s Bitcoin adoption validates BTC as a currency. According to Anissimov, Bitcoin offers significant financial help for countries with weak economies like El Salvador.

“The big advantage Bitcoin will have for these economies is that they will not have any debt to pay to anyone. It also means that these countries will offer excellent opportunities for the adoption of cryptocurrencies and for crypto startups. This will eventually boost taxation and can become a growth point for this country.”
El Salvador’s Bitcoin adoption push has been met with excitement and hostility from within and outside the country. Back in August, some retirees protested the Bitcoin Law, fearful of the government paying their pensions in BTC instead of the U.S. dollar.

As many as 70% of the country’s population is reportedly against the adoption of Bitcoin as legal tender. Global financial entities such as the International Monetary Fund have also warned El Salvador against using BTC as legal tender.

Speaking to Bloomberg on Tuesday, Mark Mobius of Mobius Capital Partners panned El Salvador’s Bitcoin adoption plan, stating that the country was “grasping at straws.”

Source: cointelegraph.com


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