Bitcoin finds its way to Central America!

In a monetary experiment, El Salvador became the first country to adopt bitcoin as a national currency. 

President Nayib Bukele stated on Monday that his government had purchased another 200 bitcoins following the decision to formally adopt the currency. 

As it stands El Salvador now holds 400 bitcoins which are worth almost $21 million (AED77M) at current trading levels.

As of today, Bitcoin will be used as a legal tender in El Salvador alongside the US dollar. Bukele who rose to power in 2019, announced his bitcoin plan in June. As per the law with regards to bitcoin all “economic agents” shall accept the cryptocurrency as a form of payment. It adds that tax payments can also be made in bitcoin.

Residents of El Salvador will be able to download the “Chivo Wallet,” an application created by the government that will offer $30 (AED110) worth of bitcoin to people to promote its usage. 

Bukele tweeted, “The process of #Bitcoin in El Salvador has a learning curve. Every step toward the future is like this, and we will not achieve everything in a day, nor in a month. But we must break the paradigms of the past.”

To create the infrastructure for the cryptocurrency El Salvador has partnered with a digital finance company named Strike. Cryptocurrencies have to be held in digital wallets, rather than through a bank account – meaning poorer communities that have less access to banks will now have greater access to their finances via bitcoin. 

El Salvador’s government is hoping that having bitcoin as a legal tender will attract new investments. They also hope that it would reduce commissions paid for sending money overseas.