El Salvador has purchased the first 200 Bitcoins! Will allow Bitcoin as legal tender

El Salvador’s President Nayib Bukele confirmed on Monday that the government has purchased its first batch of 200 bitcoins ahead of the introduction of a new law on September 7 making the cryptocurrency legal tender.

“As the deadline approaches our brokers will be buying more,” Bukele wrote on Twitter, referring to the full implementation of the new Bitcoin laws on September 7.

El Salvador is the first country in the world to recognize Bitcoin as legal tender. Despite opposition from local groups, the government believes that cryptocurrencies will have a positive impact on the economy and society.

The purchase is part of a new $150 million Bitcoin fund passed by El Salvador’s Congress last week. The fund will be used to facilitate the conversion from Bitcoin to U.S. dollars until the new law is implemented. At current prices, the BTC purchase is worth a little over $10.36 million.

As previously reported by BitPush, in June this year, El Salvador became the first country in the world to recognize Bitcoin as legal tender. While the decision was praised by the Bitcoin community, critics of the World Bank and the International Monetary Fund warned that the new strategy was not a good idea. Recently, hundreds of people across the country protested the new Bitcoin law.

However, Bank of America recently outlined at least four potential benefits of accepting Bitcoin in El Salvador. In a report published in July, the bank said that Bitcoin adoption in the country could simplify remittances, promote financial digitization, provide more consumer choices, and open up to foreign investors.

The new Bitcoin law allows Salvadorans to hold Bitcoin as part of a long-term investment strategy or withdraw it in cash at 200 ATMs installed across the country. The country is also building infrastructure to support Chivo, a state-issued Bitcoin wallet. The Chivo wallet will have its own ATMs, allowing citizens to withdraw cash 24 hours a day without paying commissions.

Javier Argueta, Nayib Bukele’s legal adviser, said in an interview that businesses that refuse to conduct bitcoin transactions and do not use the national Chivo wallet will face sanctions under the country’s consumer protection laws.