In a few days, in early September, Bitcoin will become a legal tender in one of the Latin American countries – El Salvador. The preparations for this event are in full swing.
Pro-Bitcoin Nayib Bukele, the President of El Salvador announced that 200 bitcoin ATMs and 50 bitcoin kiosks will open across the country by 7th September. These ATMs will allow Bitcoin users to convert their BTC into US dollars and then withdraw them in cash.
All transactions will be carried out through the Chivo government application, and no transaction fees will be charged. President Bukele said on Twitter, “Our town pays $400 million (~£293 million) a year in commissions on remittances. A Salvadoran abroad will be able to send money instantly to their relative in El Salvador. You can send yourself #bitcoin (if you want) or you can send yourself dollars, if you want.”
Nayib Bukele believes that another advantage of the introduction of BTC will be that businesses could receive payments in Bitcoin from tourists and entrepreneurs.
The Bitcoin law in El Salvador comes into force on 7th September. From that day on, all the citizens will be able to download the Chivo Digital government wallet and receive $30 (~£22) worth of BTC upon registration. In order to do this, along with supporting the conversion of BTC into USD, the government is creating a fund of $150 million (~£110 million).
The Minister of Finance of El Salvador, Alejandro Zelaya, commented on the undergoing work in an interview with local television. In the conversation, he stressed that, despite significant changes, the dollar will remain the main currency in El Salvador and will be the country’s accounting currency.
El Salvador is making every effort to adopt BTC as soon as possible, yet, minding the regulatory measures. Recently, this Latin American country has issued two draft regulations, which pay special attention to the distribution of BTC by commercial banks.
The central bank, Banco Central de Reserva (BCR), has published draft documents on the supply of Bitcoin products in the country. The draft clearly states that any financial institution wishing to distribute Bitcoin must undergo a regulatory process under the established rules.
At the same time, the Central Bank will have “access in real time to all information related to the operations carried out, as well as information requested by clients.”
To this day, Latin America remains a region with a high level of inflation. In Salvador, Argentina and other neighbouring countries, Bitcoin has long become popular due to the depreciation of national currencies. Therefore, the authorities express a high interest in the legalisation of BTC. Although according to the surveys conducted, El Salvador’s citizens are not quite welcoming to Bitcoin, the government is doing its utmost to make a smooth transition to crypto payments.
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