25 Mar El Salvador Congress backs $150 million fund for Bitcoin ahead of adoption as legal tender
El Salvador’s Congress on Tuesday approved a law to create a $150 million (€127 million) fund to facilitate conversions from Bitcoin to US dollars ahead of the Central American country’s planned adoption of the cryptocurrency as legal tender next week.
With 64 votes in favour and 14 votes against, Congress approved the fund as El Salvador, which already uses the US dollar, prepares to officially adopt Bitcoin on September 7.
The Central American country will be the first in the world to use the cryptocurrency as legal tender.
Money for the new fund will redirected from the finance ministry’s current budget and administered by the state development bank of El Salvador (BANDESAL), lawmakers said.
Help centres, cash machines and digital wallets
“The purpose of this law is to financially support the alternatives that the state provides, without prejudice to private initiatives, that allow the user to carry out the automatic and instantaneous convertibility of bitcoin to the United States dollar,” a congressional document said.
As part of preparations for El Salvador’s adoption of Bitcoin, at least 200 cash machines and 50 consulting centres linked to the government digital wallet app “Chivo” are being installed in different parts of the country.
Users will be able to deposit and withdraw money without paying commission, according to President Nayib Bukele, who announced the initiative in June.
‘No to money laundering’
Last week, protesters of the move to make Bitcoin legal tender took to the streets of El Salvador’s capital, San Salvador.
Hundreds of demonstrators – including workers, veterans, and pensioners – marched through the city on Friday to voice their concerns about the use of cryptocurrency, especially if in the future it was relied on to pay for pensions and welfare instead of the US dollar.
Protesters held up signs saying “Bukele we don’t want Bitcoin” and “No to corrupt money laundering”.
“We know this coin fluctuates drastically. Its value changes from one second to another and we will have no control over it,” Stanley Quinteros, a member of the Supreme Court of Justice’s workers union, told Reuters.