El Salvador Recognizes Bitcoin as Legal Tender, Buys 200 BTC

Just a day before Bitcoin became a legal tender in El Salvador, the president of the country confirmed the first purchase of 200 BTC through his personal Twitter account.

The nation from Central America passed a law back in June — which came in effect on 7 September — that would make Bitcoin, the world’s largest cryptocurrency by market cap, a legal tender in the country. On 6 September, just a day before the law came into effect, the country’s president, Nayib Bukele, revealed via Twitter that El Salvador had purchased 200 BTC.

Bought for around $10.4 million, the Bitcoins are part of a $150 million BTC fund — approved last week by the El Salvador’s government — which is meant to facilitate the conversions of BTC to U.S. dollars in the country. El Salvador has also been working on building infrastructure to support the new BTC law, which also includes a new wallet called Chivo that will be pre-loaded with $30 worth of the currency when it is downloaded.

While El Salvador has become the first country in the world to recognize BTC as legal tender, its decision was also met with opposition. Not only did the World Bank and International Monetary Fund warn the country its new strategy was not a good idea, but even retirees and veterans in the country came out in protest of the law, in fear the government will start paying their pensions in BTC instead of U.S. dollars.

The Bank of America, however, has come up with a report that outlines at least four potential benefits the new policy could have on El Salvador. The adoption of BTC in the country could not only streamline remittances and promote financial digitization, but could also provide greater consumer choice and open the country to new foreign investors.