The government of El Salvador bought its first 400 bitcoins, and President Nayib Bukele promised to buy many more, ahead of the official adoption of the cryptocurrency in the country.
El Salvador was the first country to officially adopt bitcoin, 12 years after bitcoin was born.
At the current exchange rate, 400 bitcoins are equivalent to USD 20 million. President Bukele announced this purchase via his Twitter account, when his administration bought the first 200 bitcoins, and confirmed that he would buy more before the deadline.
El Salvador has just bought it's first 200 coins.
Our brokers will be buying a lot more as the deadline approaches.#BitcoinDay #BTC🇸🇻
— Nayib Bukele (@nayibbukele)
September 6, 2021
He then stated that the number of bitcoins that had been purchased was 400 bitcoins. The bitcoin exchange rate itself rose 1.49% to USD 52,680 per bitcoin after the purchase.
El Salvador will legalize the use of bitcoin on September 7, a move Bukele said would save millions of dollars in fees Salvadoran citizens who work abroad have to pay when sending money to their families living in El Salvador.
But based on surveys, El Salvadorans tend to be skeptical of bitcoin. Mainly because of bitcoin's volatility, the exchange rate can fluctuate in large numbers and is very risky for financial institutions in the country.
The government of El Salvador has prepared a bitcoin wallet called Chivo, which will contain bitcoins worth USD 30 for its citizens who register using an El Salvador ID card.
Places of business in the country are also required to accept payments using bitcoin, both for goods and services. The government will also accept tax payments using bitcoin.
Previously, President Bukele, had a new idea to mine Bitcoin. He asked companies in his country to provide mining resources using energy from the country's volcanoes.
Bukele asked the state-owned geothermal power company, LaGeo, to develop a plan to build a Bitcoin mining facility using renewable energy from volcanoes.
