El Salvador has become the first country to adopt Bitcoin as legal tender, announced the country’s president on Bitcoin Day.
On June 6, the Central American nation’s Bitcoin law was sent to its Congress by President Nayib Bukele and was approved in the legislative assembly via a “supermajority” with 62 out of 84 votes.
The experiment will be monitored by enthusiasts and critics of cryptocurrencies to see if a considerable number of people want to use cryptocurrencies in their transactions.
The experiment will also delve deeper into whether the use of Bitcoin can benefit the impoverished country. According to reports, the country has set up Bitcoin ATMs to convert cryptocurrency into US dollars and to let citizens withdraw the same in cash.
El Salvador has purchased 400 bitcoins ahead of the big assessment, with a market value of close to $20 million at its current price.
The move is being said to be an unpopular one with just 30 percent of the citizens happy with the adoption of the new currency, whereas 70 percent feels the policy must be repealed.
The Finance Ministry created a $150 million fund at state-run bank Banco de Desarrollo de la Republica de El Salvador, Bandesal, to back the transactions.
The country has planned to buy more cryptocurrencies according to President Nayib Bukele via Twitter after purchasing the first batch of 200 bitcoins.
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The President took to Twitter again when the country bought another 200 bitcoins.
This move will help people in the country use Bitcoin in exchange for goods and services. The government will also accept cryptocurrency for tax payments.
El Salvador will get an initial boost from the government’s Bitcoin wallet Chivo that comes pre-loaded with $30 worth of currency for users who register with the country’s ID number.
Last month, Cuba had proposed the adoption of cryptocurrency as legal tender and if the move by El Salvador is found successful, then other countries in nearby regions may adopt it too.
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