El Salvador becomes the first country to accept Bitcoin as legal currency.
Meanwhile, the Salvadoran government will contribute $ 150 million to a trust fund to facilitate dollar conversion. Furthermore, the government has created a digital wallet called "Chivo," which is Salvadoran slang for "cool," and will reward residents who download it with a $ 30 Bitcoin incentive.
. Salvadorians will be able to withdraw funds in cash at 200 ATMs. and 50 other locations. In a first setback illustrating Bitcoin's challenges, the government had to take the digital wallet offline due to technical issues.312 The Salvadoran government made an initial purchase of 400 Bitcoin, valued at the time of acquisition at around $ 21 million. Many financial experts are sceptical about El Salvador's switch to Bitcoin. They point out that cryptocurrencies such as Bitcoin are highly volatile and speculative assets without a physical medium, and are therefore likely to rise and fall alternately.
e dollar" cautioned Moody's analyst Jaime Reusche, who downgraded El Salvador in July in part due to the Bitcoin law. He went on to say, "It's certainly unprecedented." Commenting on Bitcoin's volatility, taxi driver Daniel Hercules said, “This is one of the things that worries me the most.
” Most respondents to a recent survey indicated that they did not have it. 'intention to use Bitcoin. In another poll, more than two-thirds wanted the Bitcoin law to be repealed32. El Salvador is now a global laboratory. Some observers see a strange irony in the Salvadoran government's decision to adopt a digital currency designed, in large part, to bypass traditional controls that governments impose on money.
Others fear that El Salvador may be used as a test subject to advance the agenda of cryptocurrency promoters. The World Bank and the International Monetary Fund (IMF) see El Salvador's adoption of Bitcoin as a potential destination for money laundering and other illegal financial activities. can be used to launder illicit money, finance terrorism, and evade taxes, "the IMF warned in a blog post, adding:" This could pose risks to a country's financial system, the balance budget and relations with foreign countries and correspondent banks. risk-free with $ 100,000 in virtual cash Tests your trading skills with our FREE stock simulator. Compete with thousands of Investopedia traders and trade your way to the t
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