Digital Assets: El Salvador Readies For Bitcoin-USD Convertibility With $150M Trust

August 31, 2021 | Digital Assets, News

The El Salvador government is moving forward inexorably on its objective to make bitcoin legal tender in the country, despite sporadic protests.

The Finance Commission of the El Salvador Legislative Assembly is going ahead with the creation of a US$150 million bitcoin trust to ease convertibility between the cryptocurrency and the US Dollar, the country’s adopted currency that serves as legal tender. (Bitcoin Magazine)

Bitcoin law

El Salvador’s bitcoin law will take effect on September 7. Citizens can download the state-sponsored Chivo digital wallet and receive US$30 by way of bitcoin from the government after entering ID proof.

Earlier this month, a Bloomberg report said the country was readying to instal as many as 200 bitcoin ATMs across the country.

About 50 financial branches will also be designated to facilitate the launch of bitcoin, allowing people to withdraw or deposit money.

Bitcoin Trust

The $150 million bitcoin trust will be carved out from a $500 million loan sanctioned by the Central American Bank for Economic Integration.

The amount would be allocated to the Development Bank of El Salvador (Bandesal) for managing the inter-exchange between the dollar and bitcoin.

Another $30 million would be allocated to President Nayib Bukele’s scheme to pay $30 to every Salvadoran by crediting to their Chivo wallets.

About $23.3 million will be used to set up the locations, dubbed “Criptofriendly,” where the government will instal bitcoin ATMs.

Protests against bitcoin law

On Friday, hundreds of workers, veterans, and pensioners mounted a protest against the bitcoin law by marching through the streets of San Salvador, the capital of El Salvador.

They had misgivings that in future they would be made to accept pension and welfare payments in the highly volatile bitcoin cryptocurrency.

“We know this coin fluctuates drastically. Its value changes from one second to another and we will have no control over it,” said Stanley Quinteros, a member of the Supreme Court of Justice’s workers union, to Reuters.

Related Story:   El Salvador Makes History Adopting Bitcoin As Legal Tender Alongside The US Dollar                                            

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