Bitcoin became legal tender in El Salvador

El Salvador became the first country on Tuesday to adopt bitcoin as its national currency, kicking off a radical monetary experiment that could pose a threat to a fragile economy.

President Nayib Bukele announced late Monday night that his government had bought 200 bitcoins before the official currency was introduced. He added another 150 on Tuesday, raising the country’s total bitcoins to 550.

Bitcoin is now legal tender in El Salvador next to the US dollar. The risks of the approach were highlighted on Tuesday as Bitcoin prices fell sharply on a day Bukele calls “Bitcoin Day”.

2019. Bukele, a right – wing populist who came to power in June, announced plans to use bitcoin in June. The law, which makes bitcoin a legal tender, says that all “economic agents” accept cryptocurrency as a method of payment. It also stands there that taxes can be paid on bitcoins.

Salvadorans can download the government-created app “Chivo Wallet,” which delivers $ 30 worth of bitcoin to people to promote its use.

El Salvador's 'Bitcoin Beach' is looking to ride the cryptocurrency wave as bitcoin becomes legal tender in the Central American country https://t.co/JJmTjhMuvg pic.twitter.com/PhqdSFk1Ny

— Reuters (@Reuters) September 7, 2021

Locals are skeptical

Opinion polls have shown that Salvadorans are skeptical about the use of bitcoin, fearing its volatility and unsure how it works.

Salvador street protest breaks out against bitcoin adoption https://t.co/2QHP9UrXCa pic.twitter.com/CHQWgGtYug

— Reuters (@Reuters) September 7, 2021

More than 1,000 people protested against the introduction of bitcoin in San Salvador on Tuesday, burning tires and firing fireworks in front of the Supreme Court building. Access to bitcoin technology can be quite difficult for the poor, as almost half of the population does not have an internet connection and many others have very poor access.

On top of that, the rating agency Moody’s downgraded El Salvador’s creditworthiness after the approval of the bitcoin law.

More and more countries are looking to the crypt

We can read in the latest news that the Ukrainian Parliament also passed a law to legalize cryptocurrencies in Ukraine. Cryptocurrencies have not been legal or prohibited in Ukraine because there were no laws defining them. Ukrainians were able to buy and exchange virtual currencies, but local courts were unable to protect them if something went wrong.

If signed by President Volodymyr Zelensky, the law will protect the owners of virtual assets and exchange platforms from fraud. It will also determine how Ukraine will regulate the cryptocurrency market in the future.