El Salvador’s Congress has approved a law to create a $150 million Bitcoin Trust with the aim of facilitating BTC/USD conversion.
According to reports, in anticipation of the planned adoption of Bitcoin as the country’s legal tender on 7 September 2021, El Salvador is preparing by establishing a dedicated fund.
The law for the Bitcoin Trust, passed by 64 votes to 14, fortifies the country’s decision to be the first in the world to adopt Bitcoin as legal tender.
Lawmakers reportedly said that the money for the new fund will be redirected from the current budget of the Ministry of Finance and administered by the State Development Bank of El Salvador (BANDESAL).
In this regard, the document issued by Congress describes as follows:
“The purpose of this law is to financially support the alternatives that the state provides, without prejudice to private initiatives, which allow the user to make the automatic and instantaneous convertibility of bitcoin to the United States dollar.”
El Salvador and the Bitcoin law ready to be a reality
“La Ley Bitcoin’, or the Bitcoin Law, in El Salvador has put the country at the centre of the crypto landscape, as in exactly five days it will be legal to use US dollars or bitcoin.
In addition to the Bitcoin Trust, El Salvador has also already formalized other channels to support the new currency.
Last week, in fact, Chivo points were introduced, i.e. El Salvador’s official wallet app that would entitle citizens to withdraw their first 30 dollars in BTC.
Not only that, under the same brand, 200 Bitcoin ATMs have already been set up where BTC/USD and USD/BTC can be converted, without commissions and 24 hours a day. In addition, information points have been set up at each counter to educate citizens not yet introduced to the crypto world.
Bitcoin: Nayib Bukele vs the naysayers
The main supporter of Bitcoin and its official adoption is the president of El Salvador, Nayib Bukele. It was he who, at the end of June, announced the country’s new monetary reality with the coexistence of BTC and USD, stressing that bitcoin would still be the optional legal tender.
On the other hand, however, not everyone seems to support this idea. A sort of battle between Nayib Bukele and the opponents on the Bitcoin Ley is therefore underway.
Among the many who have spoken, some like the international rating agency, Fitch Rating, have described the choice as risky. According to Fitch Rating, using Bitcoin to conduct daily transactions would increase institutions’ exposure to credit volatility.
Then again, local economist Ricardo Castañeda reportedly said that Bukele is not well aware that the risk of making Bitcoin official could convert the country into a money laundering haven.
Si tomamos en cuenta el impulso que dará la Ley #Bitcoin, la inyección de $30 por persona en moneda deflacionaria, el fideicomiso del salario mínimo, el fideicomiso de reactivación económica y el no pago de comisiones por las remesas…
Estoy seguro que la cifra será mayor 😉 https://t.co/D1fMs36shG
— Nayib Bukele 🇸🇻 (@nayibbukele) September 1, 2021
“If we consider the boost that the Ley Bitcoin will give, the injection of $30 per person in deflationary currency, the confidence on the minimum wage, the confidence on economic reactivation and the non-payment of commissions for remittances…. I’m sure the figure will be higher.”
Despite the aforementioned risks and dangers, Bukele seems to stand firm on his decision, valuing BTC as the “deflationary currency” and therefore a growth factor for El Salvador.