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El Salvador purchases Its First 200 BTC, president says

Photo: jose cabezas/Reuters

El Salvador is the first country in the world to recognize Bitcoin as a legal currency. Despite opposition from local groups, the government believes that cryptocurrency will be a tool that could go a long way in strengthening El Salvador's economy.

El Salvador's President Nayib Bukele announced on Twitter that his government has bought its first 200 Bitcoins (BTC) ahead of Sept. 7, the effective date of a new law that will make cryptocurrency legal tender.

"El Salvador has just bought it's first 200 coins," he wrote. "Our brokers will be buying a lot more as the deadline approaches."

The purchase is part of a new $150 million Bitcoin fund approved last week by El Salvador's Congress. The fund will be used to facilitate conversions from BTC to U.S. dollars ahead of the implementation of the new law.

In June of this year, El Salvador became the first country in the world to recognize Bitcoin as a legal currency. Although the decision has been greeted with praise by the Bitcoin community, detractors from the World Bank and International Monetary Fund have warned that the new strategy is not a good idea.

Meanwhile, the Bukele government is taking several steps to simplify Bitcoin adoption. For example, it is launching a digital Bitcoin wallet called "Chivo," where new users will receive $30 in Bitcoin. Chivo ATMs, which will allow consumers to purchase Bitcoin or convert it to cash with the government absorbing the fee costs, are also being installed across the country. Athena also confirmed its commitment to the progressive installation of 1,500 ATMs that will allow for the immediate conversion of cash to Bitcoin and vice versa.

Moreover, according to Nayib Bukele, citizens will not be forced to make a data plan for their smartphone, which instead will be offered directly by the state, thus allowing even the poorest segments of the population to access the world of Bitcoin.

As well as the World Bank and the International Monetary Fund have a negative opinion on the crypto strategy of El Salvador, there are also those who like the Bank of America had recently spoken positively in a report showing the potential benefits that El Salvador could get thanks to the legalization and adoption of Bitcoin in the country, in their report published in July, the bank spoke in particular of 4 important benefits summarized below:

1. Reduce the cost of remittance transactions

2. Financial democratization

3. More options for the consumer

4. Potential to attract Foreign Direct Investment (FDI)

Being the first country in the world to have done something like this it will be very interesting to follow in the coming months and years the adoption of Bitcoin and cryptocurrency within the country, and how Bitcoin and a crypto exchange system will impact the economy of El Salvador, so that other countries (in case of a positive outcome) can replicate it or even propose an improved system to be applied within their own country. However it goes on the symbolic level this is definitely an event that will remain in the history books of the crypto community.