Bitcoin was officially adopted as a means of payment in El Salvador. President Nayib Bukele announced this on Twitter. The country became the first in the world to grant this status to cryptocurrency.
El Salvador is the first in history to use Bitcoin as an official currency
Bukele said that recognizing bitcoin would make it easier for El Salvadorians working abroad to send money home. In addition, the day before the law came into force, the country purchased 400 bitcoins worth more than $ 20 million.
The administration of President Nayib Bukele, 40, plans to spend more than $225 million on the rollout, including a $30 credit in bitcoin to those who take up Chivo—local slang for “cool”—the government-run e-wallet that can be used for purchases in bitcoin or U.S. dollars.
Recall that in June 2021, the Parliament of El Salvador adopted a law recognizing bitcoin as an official means of payment. According to the document, the authorities should create an infrastructure for working with cryptocurrency and payments within 90 days. In July, about 200 ATMs were available in the country to transfer dollars to bitcoins.
However, many residents do not support the official recognition of the cryptocurrency. According to the University of Central America (UCA), about 6.5 million citizens have opposed and continue to use US dollars.
Bitcoin tumbles nearly 10% as El Salvador adopts it as legal tender
After a brief period of this news, the bitcoin rate collapsed sharply; although before that, for several weeks in a row, the main cryptocurrency of the world was growing steadily. Now there is a possible explanation for what is happening.
If in the morning the rate recovered from $ 46,000 to $ 47,000; now it is trading around the $ 45,000 mark. Over the past day, the drop was 13.5%, and over the week, the cryptocurrency fell by 4.4%. The market capitalization of the cryptocurrency, which yesterday was approaching the $ 1 trillion mark, dropping now to $ 850 billion.
So, according to the Independent, the fall is linked to the troubled introduction of bitcoin as El Salvador’s official currency. Yesterday El Salvador became the first country in the world to use Bitcoin at the state level. The corresponding law was available earlier, in July.
However, shortly after the announcement of the legalization of bitcoin, President of Salvador Nayib Bukele tweeted about problems with the country’s official bitcoin wallet Chivo. It had to temporarily disable it due to bandwidth issues. It is likely that the exchange rate will stabilize in the near future; when they fix the problems in El Salvador.