BRAZIL RIO DE JANEIRO -According to information consulted on Wednesday by Efe, the Salvadoran Government requested that the Legislative Assembly approve the use of Bitcoin in-laws of over 200 million dollars.
The legislative body approved an initiative of the Minister of Finance at its Tuesday meeting to incorporate US$500 million into the state budget, of which more than $200 million is being applied for Bitcoin.
The document states that USD 150 million will be used to “operative the circulation of Bitcoin’s digital currency” for a trust fund managed by a State bank.
Such trust would help to make Bitcoin’s dollars “automatic and instantaneous convertible” and “Electronic wallet bonus.”
The Treasury has also asked Nayib Bukele to allocate US$23.3 million to a project called ‘Cryptofriendly’ to “finance the implementation of the Bitcoin Law.”
According to the document, another US$30 million would have been intended to provide a bonus or incentive in Bitcoin for use in the electronic government wallet.
These funds come from a USD 600 million loan granted to the Salvadoran Companies by the Central American Development Bank (CABEI) (Firempresa).
This trust fund has provided loans and subventions for the covid-19 pandemic but is subject to state budget funds and is therefore treated as a “reimbursement” for funds provided by the CABEI.
As a measure to eliminate the payment of US transfer commissions that sustain the Salvadoran economy, Bukele’s Government promoted the Initiative as data from the Central Bank show that in 2020 it was more than $5.9 billion.
According to a university survey 77.5% of the population regard the adoption of Bitcoin in El Salvador as a legal tender.
The Francisco Gavidia University (UFG) Centro de Estudios Ciudadanos (CEC) survey shows that the decision is not wise by 24% and the decision is not entirely wise by 53.5%. In contrast, 12.9% say it’s correct and 6.5% very correct.
El Salvador is the first country in the world to allow Bitcoin to circulate with the dollar as a legal tender, and the Bitcoin Act is due to come into force on 7 September next.