Earlier in June this year, El Salvador passed a historic law that legalized bitcoin as an official currency in the country. September 7 marks the day when this law takes effect and six million Salvadorians will wake up in a brave new world, where one can even pay taxes in bitcoin. In the run-up to the day, the country has purchased 400 bitcoin, President Nayib Bukele tweeted.
The country made global headlines when it passed the law but economists and cryptocurrency enthusiasts will watch the country closely to gauge whether a crypto coin can serve the purpose of a currency in real-world situations. President Bukele is well aware of this and even tweeted that "for the first time, the eyes of the world will be on El Salvador," crediting this achievement to bitcoin.
Apart from passing the law, the country has also put in efforts to make it easy to transact with the crypto coin. 200 bitcoin ATMs have been installed in the country that will facilitate the exchange of the crypto coin to the US dollar, El Salvador's official currency so far, Bloomberg reported. To back the transactions, the government has also created a $150 million fund at a state run-bank.
The adoption of the crypto coin is being promoted through the government-backed Chivo app, a digital wallet that will give away $30 worth of bitcoin to all Salvadorians, who sign up for the services. The president's official Twitter handle also shared a promotional video and tutorials on how to use the app.
However, Reuters reported that locals are not happy about the new law and many have received little official communication. A poll conducted in July showed that 75 percent of Salvadorians had reservations about the law and many preferred to continue to use the US dollar instead, Business Insider reported.
However, the 40-year-old President Bukele, who is steaming ahead with these plans, believes that the transition to a crypto economy is important for the country. The country received six billion dollars in foreign remittances last year and according to Bukele, could save $400 million in transaction fees a year by moving to bitcoin, Bloomberg reported. The government insists that bitcoin isn't mandatory and the U.S. dollar will remain the currency for accounting purposes. Businesses that cannot accept bitcoin due to technical reasons can continue to use U.S. dollars for their transactions.