Sunday, April 14

El Salvador Bold Move on Adopting Bitcoin as its Legal Currency

On Monday, El Salvador’s president Nayib Bukele announced that on the following day (7th September 2021), the nation will become the first country in the world to implement Bitcoin as its legal tender. His proposal on to legal tender bitcoin as its currency sparks outrage and shockingly, it has been passed in the parliament. Receiving huge majority, Bitcoin have started being used nationwide on Tuesday. Everyone is required to use Bitcoin except for those who lacks such technology are not required to do so.

Nayib Bukele stated that the money that they have in US Dollars are remained untouched. This is because Bitcoin is being used as their second currency as of now. Every citizen needs to download a state-run application called Chivo. This application would help the user to check their account balance, transfer money and also study the value of the bitcoin live. There are still ATM machines in the nation as people can use it to withdraw their money.

The government has created an initiative to encourage people to use bitcoin – for their citizen who uses Chivo, the user will receive $30 worth of bitcoin in their account. However, as the value have crushed badly on the day, the user might just have received bitcoin but with the value of $25 or less.

His bold move has made headlines around the world especially in the currency related industries as the International Monetary Fund (IMF) indirectly gave a warning toward countries that wish to adopt cryptocurrency as their legal currency. Due to the fact that cryptocurrency is really volatile, making it not suitable to be implemented as legal tender that can threaten the country’s economy. On the first day of the implementation, the value of Bitcoin has crushed tremendously besides the users of the state-run application experienced some glitches. A few days after the adoption, around 1000 Salvadorans protested this move but the country still vowed to continue with this digital experiment. 

This country has been using US Dollars since 2001 and with bitcoin as their second currency, people all over the country have giving different feedbacks and some are welcoming this move and some hoped that this idea will be withdrew soon.

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