El Salvadore has announced Chivo, a Bitcoin wallet. While China is cracking down on Bitcoin mining by the day, resulting in a steep fall of the currency, El Salvadore’s step is turning a few heads.
On Friday, Nayib Bukele, the President of the country officially launched the application which will not only hold both BTC and USD in it, but also reward those who register with an additional $30.
While emphasizing the importance of the incentive, Bukele said, “First, to promote the use of bitcoin in the economy. Second, so that the people have an incentive to use the application and download it, and in this way start the system … so that you can go to a local store and everyone will have bitcoin because everyone will have the same incentive to have downloaded the app.”
Bukele had announced earlier in June at the 2021 Bitcoin conference in Miami that his governance will make sure to make Bitcoin legal tender in the country. A law is going to be introduced on September 7 to take it a step further named “The Bitcoin Law”
“This law is made to generate employment, to generate investments, and at no moment will it affect anybody, like opponents have tried to say with their dirty campaign,” added the President.
The law will allow citizens to make purchases with the help of the coins in their wallets and not only that, but they can also pay taxes after the law passes. In case of a difference of choice between the payer and the receiver, the app will convert the amount to suit the choice of the user.
While the critics of the move are worried that this can start a gradual process to make Bitcoin the official currency in the country, Bukele made it clear that the dollar will retain its position in the economy. However, it remains to be seen if Bitcoin can become a legal tender with the number of fluctuations it suffers from.
As bitcoin miners migrate from China, El Salvadore is surely going to be the safe haven for them and whether it boosts the economy of the country is a question that few can answer, but Bukele is optimistic, “Are there benefits? Yes, lots. Are there consequences? No, none.”
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