El Salvador, the small Central American nation is just a week away from bringing the Bitcoin Law into effect. However, the nation’s legislative assembly has approved a new Bitcoin Trust worth $150 million. The bill was passed on August 31 with 64 votes in favor and 14 against it. The main purpose of the Trust Fund would be to convert Bitcoin to US Dollar and also for supporting the crypto infrastructure in the country.
The moment when the democratic assembly from El Salvador approved the $150 million #Bitcoin trust.
Watch how the assembly reacted. pic.twitter.com/5uf3st1rfw
— Blockworks (@Blockworks_) August 31, 2021
El Salvador created history on 8th June when it became the first nation on the face of Earth to make Bitcoin a legal tender along with the US Dollar. The decision was met with Euphoria from the Bitcoin proponents while it faced a lot of criticism from the likes of IMF, World Bank, and few other financial giants. World Bank denied them of any help in implementing the technical aspects of the law whole IMF’s $1 billion financial aid also took a backseat in the wake of the Bitcoin law.
Privately issued cryptoassets like Bitcoin come with substantial risks. Making them equivalent to a national currency is an inadvisable shortcut. Read more in our #IMFBlog by the IMF’s Tobias Adrian and @RhodaWeeksBrown: https://t.co/r1NwBuyAq8 pic.twitter.com/Sk9tOjvhD6
— IMF (@IMFNews) August 29, 2021
President Nayib Bukele has led the Bitcoin charge in the country with the announcement of several adoption plans and even launched the country-wide Bitcoin wallet program. Bukele has maintained throughout that the massive change in the country’s economic operations is no fluke or gimmick and they are planning to uplift nearly 70% of the population using BTC in absence of banking facilities. He also plans to make El Salvador a hub for clean Bitcoin mining with the geothermal energy supply that the country has in abundance.
How $150 Million BTC Trust Will be Utilized?
The Development Bank of El Salvador has been appointed as the caretaker of the $150 million BTC trust and the trust will be created using the funds from the country’s $500 million loan with the Central American Bank for Economic Integration (CABEI). The loan was taken to revive the small and medium-sized businesses.
Out of $150 million, $23.3 million is allocated towards installations of Bitcoin ATMs and another $30 million has been kept aside as incentives to promote the use of Bitcoin in the country. The country has also installed 200 Bitcoin ATMs across the state for everyone to easily convert their BTC to USD.