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- The government is planning to develop its own Bitcoin wallet, dubbed Cool.
- Bank accounts, salaries, and pensions will all continue to be denominated in US dollars
- Customers can pay for items listed in dollars with Bitcoins from their wallets
President Nayib Bukele of El Salvador backed up his country’s new law making Bitcoin legal tender by offering $30 worth of the cryptocurrency to anyone who signs up for a digital wallet. Bukele announced during a national address on Thursday night that the government would create its own Bitcoin wallet called Chivo, which is slang for cool in El Salvador. Any citizen who downloads the app and registers as a user with their phone number and ID number will receive the funds, he said. He stated that the law-making Bitcoin legal tender will take effect on September 7th.
Free Bitcoin worth $30
El Salvador’s president, Nayib Bukele, spoke about a variety of topics related to his country’s new bitcoin law on Thursday night. During his speech, he unveiled the Salvadoran government’s wallet app as well as a $30 bitcoin signup bonus. According to Bukele, the government of El Salvador’s wallet is called Chivo, and users must register with their phone number and national ID card, known as the DUI.
The accounts are then verified using either facial recognition or a call center. Only when creating the account will facial recognition or call center verification be used. The president explained that they do it this way to provide security to the people.
You must be at least 18 years old to obtain a DUI (Documento Nico de Identidad), which is required for account verification. Only adults 18 and older, out of El Salvador’s total population of 6.5 million, are eligible for the $30 BTC freebie, according to Woldometer’s data.
The Chivo app, according to the Salvadoran president, will allow users to convert funds from dollars to bitcoin, make payments, and send money via QR code. Furthermore, he stated that app users can buy BTC in a secure, instantaneous, and fee-free manner.
Bukele’s view on legalizing Cryptocurrency
Bukele, 39, reiterated his claims that cryptocurrencies will help attract investment, boost consumption, and lower the cost of sending remittances for millions of Salvadorans working abroad. However, he stated that bank accounts in dollars will remain in dollars and that salaries and pensions will be paid in dollars.
Why was this law enacted? Bitcoin has a global market capitalization of $600 billion, and if we do this, investors and tourists who own Bitcoin will flock to El Salvador, benefiting Salvadorans and the economy, according to Bukele.
Customers can pay for items listed in dollars with Bitcoins from their wallets. According to Bukele, if business owners want to receive payment in dollars, they can press a button in the Chivo app to convert Bitcoins to dollars instantly. It will be entirely up to you. He stated that the dollar will remain legal tender. In September, the Chivo wallet will be available for download, and it will be compatible with other Bitcoin wallets, according to Bukele.
To encourage Bitcoin use, the government will provide training for businesses on Bitcoin transactions and work to improve Internet and mobile phone penetration, he said. Businesses that are unable to accept e-payments due to technological limitations will be exempt from the law, he added.
Potential for danger
Bukele’s enthusiasm for the plan isn’t shared by everyone. In a report released on Thursday, Fitch Ratings stated that making Bitcoin legal tender would increase regulatory risks for financial institutions, including the risk of violating international anti-money laundering and terrorist financing standards.
Financial institutions’ risk management frameworks for operational, cyber/ransomware, currency, and liquidity risks will be impacted by a rushed implementation of the new alternative payment system platform. Rolando Martinez, one of Fitch’s analysts, wrote.
The move has been criticized by the International Monetary Fund, and the World Bank has turned down a government request for assistance with Bitcoin implementation. According to data compiled by Bloomberg, bitcoin fell 4.4 percent to $33,338 at 10:11 a.m. in New York.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
