El Salvador buys 550 Bitcoins, officially adopts crypto as legal tender

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Bitcoin holders broadly shared their support for the country on Tuesday by asking users to buy $ 30 worth of bitcoin, to match the $ 30 given to Salvadorans. pm ET, after heavy liquidations of around 2.87 billion cryptocurrency in the past four hours

Tuesday marks the official start of El Salvador’s adoption of bitcoin as a national legal tender alongside the US dollar. Now Salvadorans can use bitcoin to pay taxes, rent, and lunch at McDonalds while receiving a paycheck in cryptocurrency.

President of El Salvador Nayib Bukele, 40, said on Tuesday the country had a rocky start with the rollout of bitcoin across the country as Chivo, the government’s official wallet for bitcoin purchases and of dollars, was facing technical problems. difficulties.

Bukele said he plans to spend more than $ 225 million on the country’s adoption of bitcoin and will give $ 30 worth of bitcoin to people who download and use Chivo. With this, the government-owned wallet temporarily went offline as server capacity increased from current levels, indicating that many citizens were trying to fit in.

Separately, the Salvadoran government bought 400 bitcoins on Monday and an additional 150 bitcoins on Tuesday as the cryptocurrency market declined, bringing its total holding to 550 bitcoins at the time of publication.

As with any innovation, the process of implementing bitcoin will have a learning curve and can take more than a day or even a month, Bukele tweeted in Spanish. But we have to break the paradigms of the past. El Salvador has the right to advance to the First World, he added.

On Tuesday, Bitcoin holders shared their support for the country by asking users to buy $ 30 worth of bitcoin, to match the $ 30 given to Salvadorans. But the positive move saw opposite results, as bitcoin fell 10.3% on the day to around $ 47,000 at 12:30 p.m. ET, after heavy sell-offs of around 2.87 billion cryptocurrency over the past few years. last four hours.

Crypto Proposals in Panama

As El Salvador formalizes its adoption of bitcoin, other Latin American countries like Panama are also taking steps to accept cryptocurrencies.

Panamanian congressman Gabrial Silva tweeted on Monday that he was introducing the crypto law to make Panama compatible with blockchain, crypto assets and the internet. The law has the potential to create jobs, attract investment and bring transparency, he added. The proposed law would promote the use of blockchain in public administration to make processes more transparent and efficient, he said.

In the past, politicians from Brazil, Paraguay, Argentina, Mexico and other countries have expressed interest in and support for cryptocurrency, Blockworks previously reported.

While the Panama-based proposal is a step towards adopting crypto for the country, it is not the same as El Salvador’s implementation of bitcoin as legal tender. The crypto bill does not aim to require the adoption of bitcoin across the country in companies like El Salvador, but calls for the allocation of cryptocurrencies to be accepted for taxes, fees. and other payments in Panama. In addition, the law aims to provide legal, regulatory and fiscal certainty for the use of crypto assets, but the use of cryptocurrencies would be optional and not mandatory, he said.

In July, JPMorgan released a report indicating that El Salvador’s approval of bitcoin as legal tender could create problems for the economy of Central American nations and the digital asset. According to the document, JPMorgan cited illiquidity, high volatility and the conversion of the US dollar as obstacles for bitcoin as a medium of exchange and questioned illiquidities linked to bitcoin.

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Jacquelyn Melinek

Jacquelyn Melinek is a Houston-based journalist who covers funds and digital asset markets. She previously reported on energy markets for S&P Global Platts and Bloomberg News and is published in more than 65 news organizations. She graduated from the University of North Carolina at Chapel Hill with a degree in Media and Journalism.

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