El Salvador’s Legislative Assembly enacted legislation Wednesday authorizing the formation of a 150 million Bitcoin Trust, showing support for the country’s growth of crypto infrastructure and services.
Yesterday, the trust’s establishment was approved by a vote of 64-14, with those in favor outnumbering those opposed. The Trust’s objectives include aiding in the conversion of Bitcoin to US dollars, promoting the adoption of technologies that will enable widespread use of cryptocurrencies, and assisting in the construction of infrastructure.
The vote, which will take place less than a week before the government legally accepts Bitcoin as legal money, is critical. El Salvador will be the first country to implement the new law, which takes effect on September 7th. The United States dollar is widely accepted as legal tender throughout the country.
The trust was established and is administered by the Salvadoran Development Bank (Bandesal). The $150 million set aside for a $500 million loan with the Central American Bank for Economic Integration will be used for other uses (CABEI). Initially, the CABEI loan was designed to support small and medium-sized enterprises in their economic recovery efforts.
A total of $23.3 million was raised, with $15 million going toward the purchase of cryptocurrency ATMs that would be available to the general public to convert US dollars to Bitcoin. The promotion of Chivo, the government’s digital wallet, would be aided by $30 million in financing.
As previously reported by Nairametrics, El Salvador’s government has offered a $30 Bitcoin airdrop to any adult in the nation who installs the Chivo wallet. El Salvador’s population of about 4 million people will accumulate a total of $120 million in Bitcoin, which is the total amount of Bitcoin the government wants to acquire.
Koibanx, a company that specializes in asset tokenization, and the government of El Salvador have agreed to collaborate on the establishment of El Salvador’s digital currency infrastructure. Algorand’s blockchain technology will serve as the project’s foundation.
The international community and El Salvador’s citizens have expressed significant criticism and mistrust over the country’s Bitcoin law. Argentina’s Economy Minister, Maria Luisa Hayém Brevé, stated that the government’s primary objective is to educate the public about cryptocurrencies and how they may help alleviate public anxiety about the country’s economic turmoil.
“Cryptoassets as National Currency?” inquires a blog article on the website of the International Monetary Fund. “A Step Too Far” was a documentary that took a strong stance against the use of Bitcoin and other cryptocurrencies as legal currency in the United States.
Although El Salvador was not addressed directly in the article, some cryptocurrency advocates believe it was intended to cast doubt on the country’s ambition to accept Bitcoin as legal cash. El Salvador’s president used a weeping laughter emoji in response to a tweet from the International Monetary Fund.