El Salvador Purchases $21m bitcoin And Becomes The First Country To Officially Recognize The Cryptocurrency

2021-09-07 17:33:29

The President of El Salvador Nayib Bukele revealed via Twitter on Monday that the country bought bitcoin assets for $20.9m. That is exactly one day prior to El Salvador becoming the first country to officially recognize bitcoin anywhere in the world.

Consequently, this is a result of the bitcoin law that the government of El Salvador passed back in June 2021. Which eventually marked the start of a new era in the country, led by a rather avid crypto-oriented President.

After making the initial tweets revealing the bitcoin purchase, President Nayib Bukele wrote another interesting tweet:

Which clearly indicates that El Salvador is truly on a bitcoin hunting mission. Consequently, becoming the first official country to hold bitcoin reserves and add bitcoin to its balance sheet.

The latest purchase of 400 bitcoin by the government of El Salvador is the first objective towards integrating bitcoin into its own balance sheet. For that matter, El Salvador will offer bitcoin together with the US Dollar. This is rather appropriate considering that this is the first such venture ever.

Moreover, just last week the Congress of El Salvador approved a bill that allows creating a $150m fund. This fund main purpose is to assist in the exchange from bitcoin to US Dollar.

El Salvador already created a special wallet application specifically for this purpose, Chivo. In particular, as soon as they register with their ID, citizens of El Salvador will receive $30 in bitcoin.

Despite many experts are saluting this idea, it seems like the population of El Salvador disagrees. As a matter of fact, a certain survey reports that almost 70% of the citizens do not approve of making bitcoin legal. And even more, are reluctant simply because they lack the knowledge of using crypto.

According to the Chief Economist at Chainalysis, this mere experiment won’t change the financial situation of the country. In fact, he believes that it will have very limited use:

Bitcoin isn’t really designed to be a means of exchange so this is an early experiment for the currency. I think the main use in El Salvador is really going to be around remittances and people using it to save some wealth and really perhaps just to be some competition to the dollar in the country.Phillip Gardwell | Chief Economist at Chinalysis

The news that El Salvador bought $20.9m bitcoin amidst making the cryptocurrency legal are just the beginning of this experiment. Considering that this is the first case in history where a country relies on crypto. And it definitely is a case where only time will tell if this is the right decision. Whatever the case, El Salvador already makes history.

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