El Salvador Just Bought $14 Million In Bitcoin As It Becomes Official Currency In The Country, What Does That Mean For The Future?
El Salvador made history this week becoming the first to allow Bitcoin as legal tender. Now, Bitcoin can be used alongside the U.S. Dollar (which is El Salvador’s other official currency) for everyday purchases and it is fully integrated into the nation’s banking system.
It is a landmark day for the country, which is the first in the world to implement such a law, and for cryptocurrencies which only stand to grow as more nations embrace the digital-based currency. However, El Salvador’s self-proclaimed ‘Bitcoin Day’ wasn’t all great news as Bitcoin’s value took a tumble as soon as markets opened. Then there’s the politics of it all, with many worried about President Bukele’s authoritarian tactics and how he may use the new system to his advantage.
El Salvador is officially the world’s first country to accept Bitcoin (or any cryptocurrency for that matter) as official legal tender.
Since becoming the first country to accept Bitcoin as legal tender, El Salvador has spent more than $14 million on Bitcoins.
President Bukele tweeted that the nation had bought 350 additional Bitcoins, bringing the total to 550. At the time of the tweet, that investment was worth almost $26 million, according to exchange rates from CoinBase. Though shortly after the country bought its first Bitcoins, the value fell by more than 10% before recovering by late Tuesday.
It was only three months ago that El Salvador and Bukele’s government shocked the world when the president announced that El Salvador would become the first country in the world to accept Bitcoin, alongside the U.S. dollar, which has been the de facto legal currency since 2001.
As part of his sales pitch to his country and the world, President Bukele has praised the possible future that Bitcoin could bring the poverty-stricken nation and that it would help propel the country forward. He’s also said it will help lure foreign investment into the country, promoting the favorable taxes of the country, and even offering permanent residency to foreigners who spend at least three Bitcoin in El Salvador.
But the launch didn’t exactly go as planned.
Before the law even officially went into effect, the new system designed to support Bitcoin in the country – called Chivo – went into meltdown with several outages reported.
“We have disconnected it while increasing capacity of the image capture servers,” tweeted President Nayib Bukele. “The installation problems that some people had were for that reason.”
Aside from the technical issues (and the drop in Bitcoin value), there was also a rare show of opposition to the very popular president’s plan for Bitcoin. In the capital, there were street protests against the law with many saying that there is just a general lack of knowledge around the world’s largest cryptocurrency and that it isn’t stable enough yet.
One protester, Martin Rivera, told Al Jazeera “I want to be clear that I don’t oppose Bitcoin,” while holding a sign that read ‘No to Bitcoin, No to Dictatorship’. “What we are against is the process that has happened and that we never had any say in this,” he added.
The country has installed several new ATMs and launched a new platform to help make Bitcoin an accessible option.
The nationwide system to facilitate the use of Bitcoin is called Chivo and is a sort of digital wallet that you’ll be able to access from your phone. However, there are also several Chivo ATMs scattered around the country that will alllow people to transfer between U.S. dollars and Bitcoin without any fees. But, again, these ATMs were down at the time of the launch.
Kevin Moreno, who was waiting in line to use a new Chivo ATM, told Al Jazeera that he had already downloaded the Chivo app and received a $30 bonus for signing up – a government incentive to get more people on board.
“I’m mostly just curious; I like to try new things,” Moreno said.
El Salvador’s move into cryptocurrencies comes as Mexico launched it’s own homegrown version called Xoycoin.
The Xoycoin was launched by a Mexican financial company called Xoy Capital, which is based in Guadalajara, and it’s the first Mexican cryptocurrency linked to Ethereum, the world’s second most important digital currency. But apart from it being the first in Mexico, the biggest news is that anyone can invest in it with just $20 pesos – about $1 USD.
That low starting price makes it an attractive option to those who may be totally new to the rather confusing world of cryptocurrencies. According to Entrepreneur, you can start investing in Xoycoin through exchange platforms such as Uniswap, MetaMask and on the xoycoin.io page.
Notice any needed corrections? Please email us at firstname.lastname@example.org