El Salvador Buys 400 Bitcoins , As It Becomes First Country To Make It a Legal Currency.
In a series of tweets on Sept. 6,
President Nayib Bukele revealed that the country
had purchased nearly $21 million worth of bitcoin.
The purchase came hours before El Salvador's bitcoin law took effect on Sept. 7.
making it the first country to use the cryptocurrency as legal tender.
According to the Central American University, 70% of Salvadorans aren't in favor of the new policy, with many citing confusion about how to use the currency.
But according to the bitcoin law, the Salvadorian government thinks it can help promote financial inclusion because about 70% of the country doesn't have access to traditional financial services.
A wallet app called Chivo was launched to encourage citizens to sign up with a national ID to start using bitcoin.
Anyone who signs up will receive
$30 of bitcoin for free.
Some experts question bitcoin's effectiveness as a currency.
Bitcoin isn’t really designed to be a means of exchange so this is an early experiment for the currency, Philip Gradwell, chief economist at data platform Chainalysis,
to CNBC's 'Capital Connection'.
I think the main use in El Salvador is really going to be around remittances and people using it to save some wealth and really perhaps just to be some competition to the dollar in the country, Philip Gradwell, chief economist at data platform Chainalysis,
to CNBC's 'Capital Connection'