El Salvador to give each adult resident $30 in Bitcoin

The president of El Salvador, Nayib Bukele, unveiled the cryptocurrency wallet Chivo. After registering in the app, every adult resident will receive $30 in Bitcoin.

With the incentive of the $30 in #Bitcoin we want the population to use this system and Bitcoin as legal tender, to multiply money in the economy and help drive the country’s economic growth pic.twitter.com/uIHHzpixgi

— Casa Presidencial (@PresidenciaSV) June 25, 2021

The app will be available on Android and iOS, and will also be compatible with other wallets. To participate in the cryptocurrency distribution, users must verify their identity.

Chivo will allow sending and receiving Bitcoin, as well as converting them to dollars. Purchases can be paid for using a QR code.

“The app will work wherever there is mobile network coverage. Bitcoin usage will be optional,” the president said.

According to Data Commons data from 2019, El Salvador’s population was 6.454 million. As analyst Willy Woo suggested, if 4.5 million adult residents start using Chivo, the number of Bitcoin users would “instantly” rise by about 2.5%.

Assuming all 4.5m adults in El Salvador take up this offer, it’s roughly a 2.5% overnight boost to #bitcoin’s global user count. https://t.co/KwkYvb2fEE

— Willy Woo (@woonomic) June 25, 2021

The Salvadoran parliament passed the bill recognizing Bitcoin as legal tender in early June. The measure will take effect on September 7, 2021.

La #LeyBitcoin will enter into force on September 7. Bitcoin will be a legal tender, and unlike what many have said, the dollar will also remain as legal tender, as explained by the President @nayibbukele. pic.twitter.com/kzRACcGk24

— Casa Presidencial (@PresidenciaSV) June 25, 2021

Earlier, Bukele said that El Salvador does not plan to adopt any alternative Bitcoin cryptocurrency as legal tender.

Earlier, the opposition called the legalization of digital gold unconstitutional.

The initiative also did not gain traction among local remittance services — only a few have integrated Bitcoin support.

According to JPMorgan analysts, the move threatens relations with IMF, on which the Salvadoran economy depends for aid. A spokesperson for the fund, Jerry Rice, said that the legalization of cryptocurrency could entail a number of risks and regulatory issues.

Central American Bank for Economic Integration announced support for El Salvador in the matter of implementing Bitcoin. The World Bank refused to assist the country, citing environmental and transparency concerns.

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