Bitcoin Starts its New Test as El Salvador’s Bitcoin Law Comes into Effect

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Bitcoin has to face a new test as El Salvador’s Bitcoin Law has come into effect and the crypto coin is now officially the national currency of the country with US Dollar.

El Salvadorian President Nayib Bukele, in the first hour of September 7, set the ball rolling by announcing that El Salvador had bought its first 200 Bitcoin. Nayib Bukele announced:

Until now, El Salvador has bought 400 Bitcoin (BTC), in two tranches of 200, and promised more were coming. With the current price of the coin, these 400 BTC purchase amounts to around $21 million. To incentivize the citizens to use Bitcoin, the government is giving $30 in free bitcoins to citizens who sign up for its national digital wallet, known as Chivo. Furthermore, foreigners who will invest in three Bitcoin will be granted residency. The government is also installing 200 Bitcoin ATMs around the country for users to convert their Bitcoin to cash.

El Salvador’s Bitcoin law was approved in June 2021 that allowed the world’s largest crypto asset Bitcoin to be accepted as tender for all goods and services in the country, along with US Dollar. The bill was presented by the President and was approved within 24 hours of being presented to Congress.

On Tuesday, September 7, El Salvador’s Bitcoin law has come into effect. With this, a big test for the coin has also begun as not everyone is happy with this Bitcoin law. Experts and regulators have highlighted concerns about the cryptocurrency’s notorious volatility and the lack of any protections for its users. IMF and World Bank have also issued repeated warnings about the consequences of this move.

A recent poll also showed that the majority of the 6.5 million people living in the country had rejected the idea of using Bitcoin in favor of the US Dollar. Therefore, this is a big test for Bitcoin and President Bukele knows it. In his recent remarks, he said:

However, Nayib Bukele believes that Bitcoin will give many Salvadorans access to bank services for the first time and will save millions in fees on remittances that account for more than a fifth of the country’s GDP.

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