El Salvador offers Bitcoin to be spent, not converted into fiat

El Salvador government officials say the Bitcoin (BTC) they plan to donate when it is about to be dropped is for spending, not converting to USD via crypto ATMs.

El Salvador offers Bitcoin to be spent not converted into
El Salvador offers Bitcoin to be spent, not converted into fiat

El Salvador offers Bitcoin to be spent, not converted into fiat

According to ElSlavador.com, the website of El Diario de Hoy newspaper, Nayib Bukele’s government is working on a $ 120 million plan to distribute $ 30 BTC to every Salvadoran through a wallet, according to the News from Per ElSlavador.com. the website of the El Diario de Hoy newspaper. New government issued cryptocurrency.

The smartphone-based app Chivo is expected to be available in or before September this year, and the government expects at least 2.5 million citizens to use it – although it is expected to start using it at some point 4 million marks.

However, Treasury Secretary Alejandro Zelaya has stated that the fund will be set aside “to promote the use of Bitcoin” instead of allowing citizens to instantly withdraw money from an ATM in USD.

Zelaya hasn’t specified exactly how the government will accomplish this, but the government is keen to encourage merchants across the country to accept Bitcoin payments as soon as possible – and believes the $ 120 million plan does will do.

Expert reaction to El Salvador’s plan to offer Bitcoin for spending, not converting it to fiat

However, naysayers reacted with contempt to Bukele’s plans and from economists to energy experts and engineers, who are mostly quoted in the local media, all expressed doubts about the president’s plan.

The same media outlets quoted Luis Membreño, a famous economic analyst and businessman, as saying:

“Bitcoin was created to violate the established order. It is for people who have no control over their finances. I believe it is a great assumption to believe that the $ 150 million trust set up by the government as a reserve fund will be enough to launch Bitcoin on September 7th. It will be very difficult to get the system working. Good action “.

However, Bukele used Twitter to create some “myths” about reports on the Chivo wallet app the government is currently developing.

He stated that the wallet will be “fully” compatible with other wallet providers and “completely free”, enabling “commission-free transfers” and “USD-BTC and BTC-USD conversions”.

In a long thread, he added that 200 stationary Chivo stores will go live across El Salvador, where citizens can exchange their BTC for USD or exchange Fiat for Bitcoin.

He also hit back on his critics, writing:

“For those of you who have asked where the government gets the money from to fund the ATMs, workers in the chivo shops, etc., I’ve never seen these people ask how we distribute the USD, what we do. I’ll pay 100% of the print value. ” plus shipping, insurance, custody, shipping and security for the safe. There is also a vault management as well as the distribution of this money to banks etc. Yes, all expenses are raised by the government. The same thing is being done with Bitcoin, just on a much cheaper basis. “

In the meantime, representatives of the crypto industry have spoken out on El Salvador’s foray into the crypto world.

In an analysis for the OKEx Academy of the Crypto Exchange, Alex Gladstein, Chief Strategy Officer of the Human Rights Foundation, was quoted as saying:

“The US government controls dollar policy through the Federal Reserve. Hence, a country that doesn’t control its currency is more likely to consider adding BTC as an alternative. I think it’s pretty easy. “

Nic Carter, a partner at Castle Island Venture, is quoted as saying that El Salvador “has nothing to lose by participating in the BTC standard”.

“The government has the interests of a single ruling party with an immensely popular mandate. That means they can afford to conduct bold experiments without risking losing political support, ”he said.

Meanwhile, others argue that Bukele’s BTC geothermal mining plan is impractical. Renowned Salvadoran geophysicist José Antonio Rodríguez wrote that he considers the idea of ​​”using geothermal energy to attract investment from Bitcoin miners” to be “too far-fetched”. He added that politicians in general “do not understand geothermal energy, nor do they take the time to understand it,” but rather dictate engineers to make their wishes come true.

Rodríguez said he was not “optimistic” about the plan, commenting:

“In China, Bitcoin miners pay around 30 USD per MWh. I don’t think they’re going to move to El Salvador to pay $ 60. “

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