El Salvador becomes first country to adopt bitcoin as legal tender

Tuesday marks the official adoption of bitcoin by El Salvador. Both supporters and opponents alike will be closely watching to see if there are enough people willing to transact bitcoins. Nayib Bukele, President of the Bitcoin Foundation, has been tweeting about buying bitcoins first and then buying them later.

El Salvador just purchased its 200th coin.

Our brokers will be buying a lot more as the deadline approaches.#BitcoinDay #BTC

– Nayib Bukele (@nayibbukele)September 6, 2021

El Salvador had previously purchased 400 bitcoins before the roll-out. At current prices, their market value is about $20 million. According to Bloomberg, the country intends to purchase ‘a lot’ more of them.

Tomorrow, for the first time in history, all the eyes of the world will be on El Salvador.#Bitcoin did this.#BTC https://t.co/h3zO2COYmb

– Nayib Bukele (@nayibbukele)September 6, 2021

The government of President Nayib Bukele claims that the move will allow many Salvadorans to access bank services for the very first time, and help them save $400 million annually on fees on their remittances from abroad.

Monday night, he announced that El Salvador had purchased its first 400 bitcoins in two tranches totaling 200. He promised more, AFP stated.

Salvadoran skeptical about using bitcoin

Surveys indicate that Salvadorans are skeptical of using bitcoin. They are wary of its volatility, which critics claim could raise regulatory and financial risk for financial institutions. Reuters said.

Jose Santos Melara, skeptic, said that bitcoin was a currency that doesn’t exist and that it will not benefit the poor as much as the rich. He took part in a demonstration by hundreds of people in San Salvador’s capital last week.

“How can a poor person invest in bitcoin if they don’t have enough food?”

El Salvador’s parliament passed a June law that allowed the use of crypto money as a tender for goods and services.

Bukele’s initiative, the bill was approved by Congress within 24 hours of it being presented — where the president and his allies hold a majority since March.

Experts and regulators raised concerns about cryptocurrency’s volatility and lack of protections for users.

To prevent arson by opposition, the government has installed more than 200 bitcoin-teller machines.

Bukele also promised $30 to each citizen who adopts this currency.

According to Laura Andrade (director of the Public Opinion Institute of Central American University), “These are decisions that the administration and legislators have made without consulting” the population. A poll found that 70% of Salvadorans were against the move.

Digital currency

Bitcoin is a digital currency which allows users to purchase goods and services, and exchange money without the need for banks or credit card issuers.

The cryptocurrency was created by unidentified programmers in 2008 as both a cryptocurrency and an electronic payment system. It is believed to be the first digital currency that allows peer-to-peer transactions without intermediaries.