Cryptocurrency Adoption in El Salvador: Congress Supports $150 Million Fund to Facilitate Bitcoin Conversions

El Salvador’s Congress passed a law to create a fund of $150 million (about Rs. 1,095 crores) to facilitate Bitcoin conversions to US dollars ahead of its planned adoption of cryptocurrency as a currency next week.

With 64 votes in favor and 14 votes against, Congress approved the fund because El Salvador, which already uses the US dollar, is preparing to officially adopt Bitcoin on September 7th. Bitcoin price in India was at Rs. 36.7 lakhs from 11:30 am IST on September 1st.

The Central American country will be the first in the world to use cryptocurrency as legal tender.

Money for the new fund will be redirected from the finance ministry’s current budget and administered by El Salvador’s state development bank (BANDESAL), lawmakers said.

“The objective of this law is to financially support the alternatives that the State offers, without prejudice to the private initiative, which allow the user to carry out automatic and instantaneous convertibility of Bitcoin into US dollars”, said a document from the Congress.

At least 200 ATMs and 50 consulting centers for the government’s “Chivo” digital wallet application are being installed in different parts of the country where users can deposit and withdraw money without paying commission, according to El Salvador President Nayib Bukele, which announced the initiative in June.

© Thomson Reuters 2021

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