Dollars for Bitcoins: El Salvador Sees Rise in Crypto Spending

0

Nayib Bukele, the crypto-supporting President of El Salvador, revealed that more US dollars are being poured in to be exchanged for Bitcoin. Asking local media outlets to investigate and confirm the development, Bukele tweeted that Salvadorans are “inserting way more USD than what they are withdrawing from the Chivo ATMs”. Chivo is a government-backed cryptocurrency wallet, functional in El Salvador. Earlier, Bukele had revealed that Chivo was being used by over two million Salvadorians, indicating the growth of the crypto space in the country.

The economy of El Salvador is also depended on the money that is sent back to the residents there from the diaspora working in foreign countries. As per Bukele, the country collected over $3 million (roughly Rs. 30 crores) in remittances in one day i.e. on October 16. The update is noteworthy because ever since El Salvador legalised Bitcoin as legal tender in September, its diaspora working abroad is being able to wire back money to the country via Bitcoin — without the involvement of any intermediary or service fee. The process has been adding value to El Salvador’s overall economy.

The public reaction to Bukele’s tweet seemed positive, with people cheering for Bitcoin adoption.

A parliamentarian in Tonga, a Polynesian kingdom of the South Pacific, has also been urging the authorities there to follow El Salvador in legalising Bitcoin to get rid of the high service fee charged by Western Union money transfer when its diaspora abroad tries to send money back to their relatives in Tonga.

El Salvador became the first nation in the world to legalise Bitcoin as a legal form of payment alongside the US dollar. Late in September, the country bought 700 Bitcoins, worth roughly $31 million (roughly Rs. 233 crores). Presently, El Salvador is reaping profits from Bitcoin. 

In August, the El Salvadoran Congress approved a $150 million (roughly Rs. 1,128 crores) funding to facilitate conversions from Bitcoin to US dollars. In September,  Bitcoin lost nearly 10 percent of its value but later recovered for the losses with a surged of over 30 percent. 

The country now has a “surplus” of $4 million (roughly Rs. 30 crores) – which is being used to build a pet hospital.


Interested in cryptocurrency? We discuss all things crypto with WazirX CEO Nischal Shetty and WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.

Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.

Leave a Reply