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In preparation for El Salvador adopting Bitcoin as legal tender, the nation is rolling out 200 ATMs and preparing 50 bank branches across the nation to allow residents to exchange crypto for fiat easily, President Nayib Bukele has announced over the weekend via Twitter.
Fast facts
- With El Salvador’s Bitcoin adoption bill coming into effect on Sept. 7, Bukele said those not interested in using BTC would be able to exchange the BTC they receive for cash at any of those locations. He also reiterated that the U.S. dollar will continue to be in circulation.
- El Salvador has also created Chivo, its own state-backed crypto wallet that would be compatible with the new ATMs and would be interoperable with any existing crypto wallet.
- “What if someone doesn’t want to use Bitcoin?” Bukele said. “Don’t download [Chivo] and continue living your normal life. Nobody is going to take your dollars […] Someone can always queue up at Western Union and pay a commission.”
- In 2019, remittances comprised almost US$6 billion — or one-fifth — of El Salvador’s total GDP, one of the highest ratios in the world. Bukele has maintained his Bitcoin adoption plan is an attempt to reduce the transaction costs for the country’s 6.5 million citizens and help its significant unbanked population.
- These comments mirror finance minister Alejandro Zelaya’s assurances last week that consumer and business acceptance of Bitcoin will be “totally optional,” assuring no one will be sanctioned for not doing so. While a relief to many El Salvadorans nervous about the adoption, the announcement contradicts the original language of the bill which stipulated that businesses and governments must accept Bitcoin for payments of goods, services, taxes and fines. Zelaya did not provide clarity on this apparent contradiction.
- Passed in early June after Bukele pushed its speedy passage by the Salvadorean parliament, El Salvador’s Bitcoin adoption law does not have broad support in the country, with a recent poll finding less than 20% of El Salvadorans agree with the measure. It also has faced criticism from the International Monetary Fund, which issued stern warnings to other countries against following El Salvador’s example, as well as institutions like Fitch Ratings, which predicts a fallout from the Bitcoin law that will hurt the nation’s insurance sector.