El Salvador has been granted a $500 million loan, and a part of it will be used to support Bitcoin transactions.
The $150 million BTC trust would be used for handling exchange between the leading cryptocurrency and dollars.
$30 million would be allocated to incentivise residents to use the new Chivo wallet.
El Salvador has approved a $150 million trust fund ahead of the country’s move to make Bitcoin a legal tender, set to take effect on September 7. This fund will support the $30 in BTC bonus once citizens in the country sign up for the digital currency wallet Chivo.
For the El Salvador government to handle the exchange between Bitcoin and dollars, a trust fund has been dedicated to the currency exchanges.
President Bukele explained that the government would purchase Bitcoin from those who choose to receive the greenback and protect their earnings from the volatility of the leading cryptocurrency’s price.
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.Follow us on social media