The introduction of bitcoin as legal tender in the Central American country of El Salvador is not yet a success for the population. The price of bitcoin fell, but for the president that decline was a reason to buy more bitcoins. The first was for El Salvador, a country in Central America. In the country you can pay everything with bitcoins since yesterday. This makes El Salvador the first country in the world to introduce bitcoin as legal tender.
Typical bitcoin phenomenon
El Salvador was immediately confronted with a typical bitcoin phenomenon. The price of bitcoin fell sharply yesterday. The crypto coin is now worth about $ 45,000 (38,000 euros) and that was just under 53,000 dollars yesterday morning.
Why a small country wants to make bitcoin legal tender
The government of El Salvador had pre-purchased 400 bitcoins, with a value of about 20 million dollars at the time. Still, the price drop was no cause for regret. Folm.io has enough information. The government even decided to buy another 150, President Nayib Bukele said. “Buy the dip,” he says, referring to a term commonly used by bitcoin traders when the price falls.
Not everyone is happy with the introduction of bitcoin as legal tender. For example, credit rating agency Moody’s lowered the creditworthiness of El Salvador after the announced introduction of bitcoin as legal tender. Many residents of El Salvador also have their doubts. They are afraid of large swings in the value of the currency and many people do not know exactly what bitcoin is.
According to Reuters news agency, almost half of the country’s 6.5 million inhabitants do not have access to the internet. Furthermore, after the introduction of bitcoin as legal tender, there were immediately digital problems. For example, the wallet app that the government introduced was initially not available for download from Apple, among others. Once that issue was resolved, it was difficult for potential users to register.
Registration was interesting for residents of the country, because El Salvador President Bukele had promised each user of the wallet $30 worth of bitcoins. That is a lot of money, because last year the GDP per capita was less than 3800 dollars (3230 euros), or less than 9 euros per day. By way of comparison: in the Netherlands, GDP per capita was USD 52,300 last year. Moveco.io has enough information. The fall in the bitcoin price therefore affects the residents of El Salvador. Chinese central bank continues to crack down on crypto market
But according to Bukele, the residents of El Salvador can save a total of 400 million dollars a year by introducing bitcoin. After all, many residents of the country receive money from relatives abroad and if you no longer have to exchange money from one currency, for example the US dollar, into another, it saves costs.
Residents of the country who do not have a bank account would also have easier access to financial services.