Earlier this month, El Salvador became the first country in the world to make Bitcoin legal tender in the country. Now the country has announced its plans to give out starter accounts to promote the use of Cryptocurrency. The starter accounts will come with $30 (roughly Rs. 2,200).
The President of El Salvador also said that the cryptocurrency Bitcoin will not be mandatory. The country has officially made Bitcoin a legal tender.
Finance Minister Alejandro Zelaya also said the government will allocate $120 million (approx Rs. 890.70 crores) to create about 4 million starter accounts or wallets. But he also said he doesn’t think that many people will take up the offer. These wallets will be called “Chivo,” a slang word in the country meaning “cool,” or nice.
The law legalizing Bitcoin will be implemented from September. The acceptance of the same is optional. The money will come out of the government’s general fund.
This has also raised a lot of eyebrows amongst the people of the country. The reason for the same is the countries national debt is already reaching troubling proportions.
Bitcoin ATM In El Salvador
Moreover, El Salvador was also the first country to have a Bitcoin ATM at the Salvadoran beach town of El Zonte. The company had installed the ATM one year back. They also announced a plan to install a second machine in the capital. Also, they also plan to install another 12 ATMs across the country. These machines give dollars in exchange for Bitcoin.
The country did make it clear that US Dollar will continue to remain El Salvador’s currency. But Bitcoin can also be used in any transaction and businesses will need to accept payment in Bitcoin.
The government also said it will promote training for people to be able to carry out transactions using Bitcoin. The president of the country also said that the decision will increase financial inclusion, investment, tourism, innovation, and economic development.
A report stated that the country receives $6 billion (approx Rs. 44,535 crores) in remittances. This money was received last year from Salvadorans living abroad. This amount is approximately 16 percent of the country’s GDP. Using Bitcoin will eliminate the cost of sending the money back to the country.
There are debates amongst experts on how good an option this decision might be. The high volatility of Cryptocurrency is the reason making it a currency can create issues.
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