El Salvador legalizes Bitcoin, buying more than 21 million USD

El Salvador bought about 20.9 million USD worth of Bitcoin, a day before officially circulating the world’s most popular virtual currency as fiat money.

El Salvador also launched a Chivo wallet application that allows citizens of this country to use ID identifiers to transact with Bitcoin. Photo: AFP/VNA

In a series of tweets on September 6, El Salvador President Nayib Bukele revealed that the Central American country had purchased a total of 400 bitcoins, the first step in a larger effort to put the virtual currency on the balance sheet. opposite to.

The El Salvador President’s tweets were posted hours apart. Based on the Bitcoin price at the time of appearing in the tweets, the total amount of El Salvador’s Bitcoin purchases amounted to about $20.9 million.

“Our brokers will buy more as the deadline approaches,” wrote President Nayib Bukele.

Bitcoin price inched up following the tweets of the President of El Salvador and was trading at around $52,681.85 at 12:16 p.m. ET.

The El Salvador President’s tweets came hours before the country’s Bitcoin Law went into effect on September 7.

President Nayib Bukele’s announcement marks a major milestone for Bitcoin. El Salvador was the first country to recognize Bitcoin as legal tender, and circulated alongside the US dollar. It is also the first country to officially include Bitcoin in the national reserve.

But the policy has drawn criticism across the Central American nation. Nearly 70% of El Salvadorans surveyed by Central American University (CAU) disagreed with the decision to use Bitcoin as fiat currency. Many of these people surveyed said they did not understand how to use this virtual currency.

On the contrary, supporters of El Salvador’s move argue that Bitcoin adoption is growing and that other countries could follow suit. According to the Bitcoin Law passed in June 2021, the government of El Salvador hopes that the ratification of this currency will promote financial development while about 70% of citizens do not have access to financial services. traditional.

El Salvador’s Bitcoin law allows for display of prices and taxes in Bitcoin, while Bitcoin transactions are not subject to capital gains tax (CGT).

El Salvador has launched a wallet app called Chivo that its citizens can register with a personal identifier (ID) to transact in Bitcoin. Users will receive 30 USD worth of Bitcoin when registering to use the service.

Last week, the Congress of El Salvador also passed a bill creating a $150 million fund to support the conversion of Bitcoin into US dollars.