In September 2021, El Salvador announced bitcoin as a national currency. The national currency of El Salvador as an Latin American Country is BTC and USD. A Salvadoran can use any currency according to their convenience, and no one is forced to use either of them.
El Salvador took a gigantic step towards the evolution of digital currencies in a world where people were preparing themselves for the cryptocurrency monetary system. Therefore, let’s discuss El Salvador, Latin American Country and the bitcoin relationship from now on.
What is a cryptocurrency?
In general, cryptocurrencies are just digital tokens having use cases as a monetary system and a store of value. Cryptocurrency trading is very profitable; check websites like the Immediate Edge Platform to know more about Bitcoin trading. The first digital token having attributes of a conventional currency to blaze the cryptocurrency industry was BTC.
After bitcoin achieved some unbelievable milestones, it drove the influx of numerous altcoins. Profound coins like ether are altcoin with superior value. Bitcoin was listed at a market value of $0.00084, and now it is floating above $50000.
How does the cryptocurrency wallet of El Salvador, Latin American Country work?
Expert advice prohibits keeping bitcoin or any other cryptocurrency in an exchange account. El Salvador has designed a robust wallet for the Salvadorans, Chivo. The term Chivo refers to the word extraordinary in general English. Since the Chivo wallet is only designed for Salvadorans, citizens of other countries cannot run this wallet on their phones.
To set up a user account in the Chivo wallet, the government of a Salvadoran needs an approved identity. El Salvador currently has 200 bitcoin ATMs, and more than 700 are being installed in the country. Chivo wallet is necessary to both send and receive bitcoin payments. In short, the customers and businesses should also install the Chivo Wallet. ‘
Is it mandatory to use BTC payment?
As discussed above, Salvadorans are not forced to use BTC as a medium of exchange. But in case a buyer is willing to accept bitcoin payment, the vendor must accept it as per the latest rules. Due to bitcoin’s volatility, it might concern most businesses, but Chivo wallet offers Salvadorans an instant conversion from BTC to dollars with a nominal transaction fee.
In a nutshell, even if a buyer pays for goods and services with BTC, businesses can easily convert them to fiat currencies. Salvadorans avail $30 in the Chivo wallet to facilitate cryptocurrency transactions as a signup bonus.
Are Salvadorans supporting this move of higher authorities?
Nayib Bukele conducted a poll about adopting bitcoin as a legal tender only amongst the higher authorities and not amongst the country’s citizens. If the president had conducted a poll amongst Salvadorans, bitcoin would have never become a legal tender. As per the reports of Central American University, more than 70% of the citizens are not supportive of this decision. At first, 70% of people did not even install the Chivo wallet.
But over time, Salvadorans came to know about the convenience and features of bitcoin payments. El Zonte is a bitcoin hotspot as the coastal area has several businessmen that accept bitcoin as a payment method. Now more than half of the Salvadorans installed the Chivo wallet.
As per reports, El Salvador generated a budget of almost $200 million to execute Bitcoin as a legal tender. Out of $200 million, the country will spend almost $140 million to purchase BTC. In addition, higher authorities have formulated a budget of $23.3 million for financing bitcoin ATMs, cryptocurrency mining plants and a new bitcoin city.
As discussed above, any Salvadoran installing the Chivo wallet will get $30 as signup. The total budget for sign up is $30 million. El Salvador has used almost half of the $140 million budget to buy bitcoin. Nayib Bukele has barely skipped any cryptocurrency dip to buy bitcoins.
Nayib Bukele has considered every dip as an opportunity to buy and make capital gains out of it when the market value rises. The country has more than 1200 BTCs at the instance, and it is more than the gold reserve of El Salvador.
You should know some facts about El Salvador adopting bitcoin as a legal tender.