The Legislative Assembly of El Salvador passed a law that approved a $150 million Bitcoin Trust. They also passed legislation to support infrastructure development and crypto services in the country.
The bill was passed by the legislature on August 31. 64 of them voted for it, while 14 voted against the creation the Bitcoin Trust. The Trust is intended to support critical infrastructure and improve the conversion of Bitcoin to US dollars. This will facilitate widespread adoption and use of digital assets.
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The government of El Salvador allocated $ 23.3 millions to the creation of crypto ATMs. They also allocated $ 30 million to encourage the use of Chivo, a state-backed wallet.
Bitcoin to be used for legal tender
The news came just one week ahead of the country’s controversial Bitcoin law’s implementation. BTC will be recognized as legal tender in the country by September 7. The legal tender in the country is currently the US dollar. Bandesal from the Development Bank of El Salvador was appointed to manage the Bitcoin Trust operation.
El Salvador plans on redirecting $ 150 million from its $ 500m loans with (CABEI), Central American Bank for Economic Integration. They borrowed the CABEI loan to support the economic recovery of small and medium-sized businesses.
The government will also channel $ 23.3 millions of funds to support the establishment of crypto ATMs that have been approved by the government. This will allow residents of the United States to exchange Bitcoin and USD for each other.
A further $ 30 million was also allocated to encourage citizens to adopt Chivo, the government’s digital wallet.
Statement by the Chairman
President Nayib Bukele announced that the government would drop $ 30 worth Bitcoin to all Salvadoran adult who download the Chivo wallet. He stated that the country’s population stands at 6.5 million, which is sufficient.
This could indicate two things. The first is that the government believes Bitcoin adoption will be lower. The second option is that they don’t have enough Bitcoin to circulate.
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Today, Koibanx is featured in the related news AnnouncementHe signed an agreement with Salvadoran government regarding cryptocurrency infrastructure. Algorand’s opensource blockchain will be used in the development of the county’s digital currency infrastructure.
Many El Salvadorans, including members of international organisations, are skeptical about the Salvadoran Bitcoin law. There has been some criticism of the law.
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Maria Luisa Hayém Brevé, the country’s economy minister, said the government is focusing on crypto education. She said that the government is using crypto incentives as a way to reduce uncertainty in their country’s population.
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