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Bitcoin Day in El Salvador. All you need to know

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Bitcoin Day

Bitcoin Day in El Salvador. All you need to know

The first country in the world to legalize cryptocurrency and start buying it. How it happened, why it is important, what is Bitcoin Day and what the authorities of other states are dissatisfied with.

Beginning

On June 9, 2021, the Parliament of El Salvador passed a law recognizing bitcoin as an official means of payment. 90 days were allocated to create infrastructure for payments in cryptocurrency.

Mining on the energy of volcanoes

The day after the adoption of the cryptocurrency law, President of Salvador Nayib Bukele instructed the president of state-owned energy company LaGeo, Minor Gil, to start mining bitcoins using “cheap, 100% clean and renewable energy from volcanoes.”

State crypto wallet

In June, El Salvador’s president announced that every adult who installs the government-developed Chivo crypto wallet app will receive $ 30 in bitcoin. The free distribution of coins is carried out in order to popularize the use of the application and cryptocurrency.

$ 150 million funds to legalize bitcoin

In early September, the Financial Commission of the Legislative Assembly of El Salvador approved a $ 150 million trust fund to support a plan to legalize bitcoin. Over time, this amount can be increased.

Opposition reaction

In June, El Salvadorian MP Jamie Guevara from an opposition party, along with a group of like-minded people, filed a lawsuit demanding that the decree on legalizing bitcoin be declared unconstitutional. One of the plaintiffs claims that the country’s authorities thus want to force residents to trade cryptocurrency.

IMF Criticism

There are a number of economic, financial, and legal problems in recognizing bitcoin as an official means of payment in El Salvador, said Jerry Rice, a spokesman for the International Monetary Fund.

Predicting economic collapse

The adoption of bitcoin as a means of payment could completely destroy the economy of El Salvador, said Steve Hanke, professor of applied economics at Johns Hopkins University. According to him, all US dollars can be withdrawn from the country by converting them into cryptocurrency.

World Bank refusal to support El Salvador

The World Bank said it could not help the El Salvadorian authorities in the transition to the use of bitcoin. The organization noted that they are ready to provide assistance to the government of El Salvador.

How the market reacted

On the morning of September 7, the bitcoin rate on the Bitxmi.com crypto exchange reached $ 52.9 thousand, after which it began to decline sharply. At the time of this writing, the first cryptocurrency is trading at $ 46.9K.

Bitcoin Day in El Salvador

September 7 was named in El Salvador the “day of bitcoin” because on this day the law on the recognition of cryptocurrency as a means of payment came into force. Also on September 7, the Chiva crypto wallet was launched, and the country’s authorities purchased 400 bitcoins.

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Disclaimer: Bitxmi News is a news portal and does not provide any financial advice. Bitxmi's role is to inform the cryptocurrency and blockchain community about what's going on in this space. Please do your own due diligence before making any investment. Bitxmi News won't be responsible for any loss of funds.

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