El Salvador to give every adult citizens free Bitcoins worth $30.
The Central American country to have its official crypto wallet.
President Nayib Bukele makes El Salvador the first country to accept BTC as a legal tender.
World Bank opposes the move to legalise Bitcoin
Yerevan (CoinChapter.com) — Bitcoin enthusiasts have just received exciting news coming from Central America. Nayib Bukele, the president of El Salvador, announced his government would give $30 worth of Bitcoin (BTC) to every adult citizen of the country.
Bitcoiners expect the move to boost Bitcoin prices globally. El Salvador has a total population of almost 6.5 million people. The number of adult Salvadorians is believed to be somewhere around 4.5 million people. According to analyst Willy Woo, should the plans materialize, the move will increase the global Bitcoin users by 2.5%.
Assuming all 4.5m adults in El Salvador take up this offer, it’s roughly a 2.5% overnight boost to #bitcoin’s global user count. https://t.co/KwkYvb2fEE
The El Salvadorian government will inject over $100 million into the Bitcoin market to acquire enough quantities of the coveted asset for its adult citizens. This news was welcome by BTC enthusiasts, who expect the price of the coin to rise, thanks to the large purchase.
As the news broke out, people wondered why any Government would want to airdrop $30 in BTC to its adult citizens free of charge. Interestingly, with the move, the President of El Salvador wants to encourage citizens to download and use his Chivo, the official cryptocurrency wallet issued by his Government.
For citizens to receive the $30 worth of Bitcoin, they need to sign up on the app, according to the tweet by the official handle of the Presidential Palace.
Será dentro de la app Chivo donde te depositaremos los $30 equivalente en #Bitcoin para promover su uso en la economía y para que la gente tenga un incentivo para utilizar la aplicación. pic.twitter.com/bi3zr6I93p
— Casa Presidencial 🇸🇻 (@PresidenciaSV) June 25, 2021
During a press conference held on June 25 announcing the news, President Bukele stated that the government’s “wallet app would even work anywhere with a cell connection, and you won’t have to have a cell plan for the app.” The app is set to be launched on September 7.
Bukele has been one of the most vocal supporters of Bitcoin. He led the efforts in seeing that the county’s congress adopted a law recognizing the digital currency as legal tender in his country.
On June 8, the president took to Twitter to announce that he had sent the Bill to Congress for approval. Bitcoin fans accepted this development with much enthusiasm.
“I’ve just sent the #BitcoinLaw to Congress”, President Bukele had tweeted.
The good news did not come late. Just a day later, on June 9, Bukele was back on Twitter with great tidings. The country’s congress had given its consent to his bill. It had received 62 out of the possible 84 votes.
The #BitcoinLaw has been approved by a supermajority in the Salvadoran Congress.
After Congress adopted the bill, the cryptocurrency jumped 6% to more than $38,000 from below $32,000.
Bitcoin prices registered a rise after the law was passed. Credit-CoinGecko
World bank opposes the move
People received the news of Bitcoin’s acceptance as legal tender with widespread enthusiasm. The World Bank, however, opted to be against the move, citing environmental concerns.
El Salvadoran finance minister Alejandro Zelaya confirmed that the Central American country had approached the bank for technical assistance.
“I want to announce that we have requested technical assistance from @BancoMundial so that, like @BCIE_Org, they can accompany El Salvador in the implementation and regularization of #Bitcoin as legal tender.”, he said.
The World Bank also confirmed the news.
“While the government did approach us for assistance on Bitcoin, this is not something the World Bank can support, given the environmental and transparency shortcomings,” a World Bank spokesperson said.
World Bank to El Salvador trying to use $BTC. ha yeah bc the world bank wants to create their own and undercut pic.twitter.com/LTD6rzkLqi
Despite getting the red flag from the World Bank, El Salvador’s president hopes to increase his country’s GDP by 25%, thanks to Bitcoin. This, of course, is through very conservative calculations of just 1% investment of the total $680 billion global-cap of Bitcoin.
#Bitcoin has a market cap of $680 billion dollars.
If 1% of it is invested in El Salvador, that would increase our GDP by 25%.
On the other side, #Bitcoin will have 10 million potential new users and the fastest growing way to transfer 6 billion dollars a year in remittances.
It is still not clear whether El Salvador will successfully benefit from the new legal tender once the law comes into effect in September. However, other countries will be looking at the country’s experiment to plan their steps. Therefore, it is unlikely that others will hurry to replicate the move without any clear evidence of its success.
Until then, the country can enjoy the spotlight that it has received from this. Let us hope it eventually pays to be the guineapig.
Yerevan-based Editor and writer focusing on topics about cryptocurrencies, NFTs, politics, and international relations. Having completed his Bachelor's and Master's degrees from Delhi's Jawaharlal Nehru University, he currently works as a reporter at CoinChapter.
Contact: karen@coinchapter.com
