Michael D McDonald and Ezra Fieser
El Salvador bought 400 Bitcoins as it prepares to adopt the cryptocurrency as legal tender from Tuesday, President Nayib Bukele said in a post on Twitter. The currency has a market value of about $20 million at current prices. The country plans to buy “a lot more” of the coins, Bukele said in a separate post, after buying the first batch of 200. Enthusiasts and detractors alike will be monitoring the experiment to see if a significant number of people want to transact with Bitcoin when it circulates alongside the U.S. dollar, and whether it brings any benefits to the violent, impoverished country. Its adoption will get an initial boost from the government’s Bitcoin wallet Chivo, which comes pre-loaded with $30 worth of the currency for users who register with a Salvadoran national ID number.
Businesses will be required to accept the digital coin in exchange for goods and services and the government will accept it for tax payments. The plan is the brainchild of 40-year old Bukele, who says it will draw more people into the financial system and make it cheaper to send remittances.