El Salvador is giving away free Bitcoin to its citizens
Millions of Americans received stimulus checks in the past year, but Salvadoreans will be soon be receiving one paid in Bitcoin.
The Central American country will give U.S. $30 worth of Bitcoin to each adult citizen that downloads and registers on the country’s new cryptocurrency app, Chivo, President Nayib Bukele said during a televised speech Thursday.
The $30 promotion is the nation’s latest effort to push adoption of Bitcoin as legal currency. Bukele announced via video at the Bitcoin 2021 conference in Miami earlier this month that he would be introducing legislation to make Bitcoin legal tender. His “Bitcoin Law” goes into effect on Sept. 7.
“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,” Bukele said during the hour-long speech Thursday.
Chivo, the crypto wallet whose name translates to “goat” in English, will be compatible with both dollars and Bitcoin, and will be available on both iOS and Android devices, Bukele said.
Since former Salvadorean President Francisco Flores passed a 2001 dollarization law, the U.S. dollar has been the most used legal tender in the country.
To sign up, Salvadoreans can download the app from an app store and enter their ID or “Documento Único de Identidad” number as well as their phone number. Upon registering, a user will receive $30 in Bitcoin from the Salvadorean government as a freebie.
“Normally, when you receive money, you can choose if you want Bitcoin or not, but those $30 are to promote the use of Bitcoin and to promote the use of the app,” Bukele said.
The crypto app could be used to make purchases at stores in Bitcoin or to take out dollars from certain ATMs, Bukele said. Citizens can also pay taxes in Bitcoin after the law takes effect.
Some in El Salvador were worried that Bitcoin will ultimately replace the dollar as the only legal tender in the country, but Bukele said that is not true. All salaries and pensions will still be paid in dollars and bank accounts that contain dollars will not be converted to Bitcoin, he said.
Bitcoin traded midday Friday at around $32,000 per Bitcoin, about $22,000 more than its price a year ago. Still, the cryptocurrency is down about 50% from its high of $64,829.14 reached in April.
Whether Bitcoin can smoothly be used as legal tender with its constant price fluctuations is yet to be seen. Advocates for the cryptocurrency are watching El Salvador as it becomes the only country in the world that will accept Bitcoin as legal tender.
Bukele, for his part, is optimistic.
“Are there benefits? Yes, lots,” he said. “Are there consequences? No, none.”Subscribe to The Ledger for expert weekly analysis on fintech’s big stories, delivered free to your inbox.
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