The President of El Salvador, Nayib Bukele, has offered Bitcoin worth $ 30 to any citizen who signs up for a digital wallet.
El Salvador’s president, Nayib Bukele, has doubled the country’s new law that makes Bitcoin legal currency and offered a $ 30 cryptocurrency to every citizen who signs up for a digital wallet.
The government will create its own Bitcoin portfolio called Chivo, which is slang for “cool” in El Salvador, Bukele said during a national address on Thursday evening. The funds will be deposited into the account of any citizen who downloads it and registers as a user with their phone number and ID number, he said.
The law making the legal course of Bitcoin will come into force on September 7, he said.
Bukele, 39, reiterated his arguments that the use of cryptocurrency will help attract investment, increase consumption and reduce the cost of sending remittances to millions of Salvadorans working abroad. But dollar bank accounts will remain in dollars, and wages and pensions will continue to be paid in dollars, he said.
“Why create this law? Because Bitcoin has a market capitalization of $ 600 billion worldwide and if we do that, investors and tourists who own Bitcoin will come to the country and benefit the Salvadorans and the economy.” , said Bukele.
Consumers can pay businesses with Bitcoins from their wallets for items listed in dollars. But if business owners want to receive the payment in dollars, they can press a button in the Chivo app to convert Bitcoins immediately into dollars, according to Bukele. “It will be completely optional. The dollar will continue to be a legal tender, ”he said.
The Chivo wallet will be available for download in September and will be compatible with other Bitcoin wallets, Bukele said.
The government is providing training for businesses on Bitcoin transactions and will seek to improve Internet and mobile phone penetration to encourage the use of cryptocurrency, he said. Companies that are technologically incapable of receiving e-payments will be excluded from the law, he added.
Not everyone shares Bukele’s enthusiasm for the plan. Fitch Ratings said in a report Thursday that legislation establishing Bitcoin as a legal tender will increase regulatory risks for financial institutions, including the potential for violations of international anti-money laundering and terrorist financing rules.
“A hasty implementation of the new alternative payment system platform will influence the financial institutions’ management framework for operational, cyber / ransomware, currency and liquidity risks, ”wrote Fitch analysts including Rolando Martinez.
The International Monetary Fund has also criticized the move, while the World Bank has rejected a request from the government to help with the implementation of Bitcoin.
Bitcoin weakened 4.4% to $ 33,338 at 10:11 am in New York, according to data compiled by Bloomberg.