SAN SALVADOR, El Salvador— El Salvador’s president has announced plans to give the country’s citizens starter Bitcoin accounts with $30 in them to promote use of the cryptocurrency.
The move followed by just a few weeks a vote by El Salvador’s Legislative Assembly to approve Bitcoin as legal tender in the country, the first nation to do so. The U.S. dollar remains El Salvador’s official currency.
Finance Minister Alejandro Zelaya said the government will allocate $120 million to establish as many as four-million starter Bitcoin accounts, or “wallets,” though he doesn’t think that many people will take up the offer.
The wallets are to be known as “Chivo,” a slang word meaning “cool,” or nice.
President Nayib Bukele has said that when the law takes effect in September, accepting Bitcoin will be optional.
“Nobody will have to accept Bitcoins if they don’t want to,” Bukele said.
Zelaya said the $120 million for the accounts will come out of the government’s general fund. “Upon registering, the person will receive $30 dollars in Bitcoins” to promote the scheme, Zelaya said.
“We hope to reach a maximum of four-million wallets. That means covering $120 million, but I don’t think we will reach that amount,” he said.
Bitcoin ATM is Popular
Meanwhile, the company that has run a Bitcoin ATM in the Salvadoran beach town of El Zonte for about a year announced it was installing a second machine in the capital and plans to put in at least a dozen others at shopping malls. The machines give dollars in exchange for Bitcoin or takes dollars and gives credit in Bitcoin.
According to the government, digital currency can be used in E Salvador in any transaction and any business will have to accept payment in Bitcoin, with the exception of those lacking the technology to do so. The U.S. dollar will also continue to be El Salvador’s currency, and no one will be forced to pay in Bitcoin, according to the legislation.
The exchange rate between the two currencies will be established by the market and all prices will be able to be expressed in Bitcoin — though for accounting purposes, the dollar will continue to be the currency of reference, according to the government.
Majority Lack Service Access
The Economy Ministry has said that 70% of Salvadorans do not have access to traditional financial services and it said the country “needs to authorize the circulation of a digital currency whose value exclusively follows free market criteria” to stimulate growth.
The president said the move would increase financial inclusion, investment, tourism, innovation and economic development.