In preparation for Bitcoin to become legal tender on September 7, the country has launched a wallet called Chivo, which supports transactions between BTC and its national currency, the US dollar.
El Salvador received a $500 million loan from the Central American Bank for Economic Integration (CABEI). $150 million would be used as the Bitcoin Trust, while $53.3 million would be used for the plan’s execution, $23.3 million of which would be used for the Chivo cashpoint kiosk and ATMs.
In addition, Bukele previously announced that each citizen in the country would receive $30 in Bitcoin if they signed up to use the Chivo wallet. $30 million has been allocated for BTC bonus as a result.
The Latin American country estimates that there are about 50,000 Bitcoin users today and is expecting to see the number skyrocket to around 4 million after the bellwether cryptocurrency becomes legal tender.
However, with the new Bitcoin law coming into effect soon, it has sparked protests in the country as some believe that it would facilitate corruption in the country known for lack of transparency in its policies.
Bitcoin price loses key foothold
Bitcoin price appears to be retracing while some altcoins have been recording new highs. The leading cryptocurrency has lost a key support level and could correct further toward $45,353.
On the 4-hour chart, Bitcoin price is forming a symmetrical triangle as indecision mounts. Currently, BTC is hovering around the lower boundary of the chart pattern as it struggles with securing support at this level.
The immediate line of defense for Bitcoin price is at the 50% Fibonacci extension level, coinciding with the base of the triangle.
Should the buyers fail to sustain prices above $46,711, the leading cryptocurrency may be vulnerable to a fall toward the 200 four-hour Simple Moving Average (SMA), which acts as the next support at $45,335.
BTCUSDT
BTC/USDT 4-hour chart
Although lower prices are not expected until Bitcoin price demonst.
Bitcoin price appears to be retracing while some altcoins have been recording new highs. The leading cryptocurrency has lost a key support level and could correct further toward $45,353.
On the 4-hour chart, Bitcoin price is forming a symmetrical triangle as indecision mounts. Currently, BTC is hovering around the lower boundary of the chart pattern as it struggles with securing support at this level.
The immediate line of defense for Bitcoin price is at the 50% Fibonacci extension level, coinciding with the base of the triangle.
Should the buyers fail to sustain prices above $46,711, the leading cryptocurrency may be vulnerable to a fall toward the 200 four-hour Simple Moving Average (SMA), which acts as the next support at $45,335
The El Salvador government has shown its commitment to Bitcoin after setting up a $150 million trust fund. The trust fund was approved by the finance commission of El Salvador’s Legislative Assembly, and it is expected to be used to support the country’s plan to make BTC a legal tender.
El Salvador set history as the first country in the world to adopt the leading cryptocurrency as a legal tender. The proposal was approved a few months ago, but it will come into effect in less than a week.
El Salvador’s Diario de Hoy newspaper has now reported that the government has set aside $150 million to help it with its Bitcoin adoption. According to the publication, the government could increase the money in the trust fund if the need arises.
The government will also launch Chivo, its official Bitcoin wallet, on September 7. While using the wallet and Bitcoin is an option, those who download and use the wallet will receive $30 in BTC from the government. According to the legislature, the $150 million allocated in the Bitcoin trust fund would help in sharing the $30 bonus to citizens who sign up for the Chivo wallet.
The adoption has also picked up steam, with the El Salvador government installing over 200 Bitcoin ATMs across the country. Bitcoin’s price has been quiet in recent days, with the leading cryptocurrency trading just above $47k per coin.
BTC is down by less than 1% in the past 24 hours, failing to surpass and stay above the $48k resistance level for the third consecutive day.
The deputies of the Finance Commission of the Legislative Assembly of El Salvador agreed Monday to create a $150 million Bitcoin trust to facilitate exchange between Bitcoin and U.S. dollars in El Salvador, according to the national newspaper El Diario de Hoy.
The El Salvadoran Minister of Economy, MarÃa Luisa Hayém Brevé, reportedly said that there is a possibility of increasing the initial $150 million allocation.
“We have several teams in the territory to show the population how to use the Chivo Wallet. We have developed a friendly application,” so that the El Salvadorans can learn to use Bitcoin, the minister explained.
Hayém Brevé also made mention of the fear and doubt about Bitcoin among some of the population, as highlighted by recent small protests. However, she went on to note that the financial world will be watching El Salvador in the coming weeks as it becomes the first country to adopt decentralized digital currency.
Despite some skepticism as to the mandated nature of the Bitcoin law, El Salvadorans will have a choice whether to accept and use the currency, or the $30 worth of Bitcoin that is being handed to them commission free. The $150 million Bitcoin Trust will help facilitate continued trade in dollars for those who are wary of the ground-breaking financial technology.
The parliament also agreed to change this year’s General State Budget to repurpose a $500 million loan from the Central American Bank for Economic Integration. It is from those funds that the $150 million to support Bitcoin transactions will be allocated to and managed by the Development Bank of El Salvador (Bandesal).
Of note, $23.3 million of those funds are being used to build the Chivo ATMs and their supporting structures all around the country. Another $30 million was reportedly promised by President Nayib Bukele to incentivize citizens to learn to use Chivo.
One week from today on September 7, every citizen in El Salvador will have access to $30 in Bitcoin from the government.