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June 27, 2022
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El Salvador Congress Approved $150 Million for Bitcoin Trust

The Congress of El Salvador passed a law to create a $150 million Bitcoin Trust to facilitate BTC/USD conversion

Second reports , in anticipation of the planned adoption of Bitcoin as the country’s legal tender on September 7, 2021, El Salvador’s congress approved $150 million for the Bitcoin Trust to do so.

The Bitcoin Trust law, approved by 64 to 14 votes, strengthens the country’s decision to be the first in the world to adopt Bitcoin as its currency.

Lawmakers reportedly said that money for the new fund will be redirected from the current budget of the Ministry of Finance and administered by the State Development Bank of El Salvador (BANDESAL).

In this regard, the document issued by the Congress describes the following:

“The purpose of this law is to financially support the alternatives that the state offers, without prejudice to the private initiative, which allows the user to automatically and instantly convert bitcoin into US dollars.”

El Salvador and the Bitcoin law ready to become reality

La ley Bitcoin ”, or the Bitcoin Law in El Salvador has placed the country at the center of cryptocurrency, as in exactly five days it will be legal to use US dollars or bitcoin.

In addition to the Bitcoin Trust, El Salvador has also formalized other channels to support the new currency.

Last week, in fact, Chivo points were introduced, meaning El Salvador’s official wallet app that would give citizens the right to withdraw their first 30 dollars in BTC.

Furthermore, under the same brand, 200 Bitcoin ATMs have already been set up where BTC / USD and USD / BTC can be converted, without commission and 24 hours a day. In addition, information points have been installed at each counter to educate citizens who have not yet seen the crypto world.

Bitcoin: Nayib Bukele against opponents

The main supporter of Bitcoin and its official adoption is the President of El Salvador, Nayib Bukele . It was he who, in late June, announced the country’s new monetary reality with the coexistence of the BTC and the USD, stressing that bitcoin would continue to be the optional legal tender.

On the other hand, however, not everyone seems to support this idea. A kind of battle between Nayib Bukele and opponents in Bitcoin Ley is therefore underway.

Among the many who spoke, some like the international ratings agency Fitch Rating , described the choice as risky. According to Fitch Rating, using Bitcoin to conduct daily transactions would increase institutions’ exposure to credit volatility.

On the other hand, local economist Ricardo Castañeda reportedly said that Bukele is not well aware that the risk of making Bitcoin official could turn the country into a haven for money laundering.

“If we consider the boost that Ley Bitcoin will give, the injection of $30 per person in deflationary currency, the confidence in the minimum wage, the confidence in economic reactivation and the non-payment of commissions for remittances…. I’m sure the number will be higher. ”

Despite the risks and dangers mentioned, Bukele seems to remain firm in his decision, valuing BTC as the “deflationary currency” and therefore a growth factor for El Salvador.

Source: cryptonomist

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