By Muhsin Ibrahim
El Salvador has become the first country to make bitcoin a legal tender in the world. According to the Central American country president, Nayib Bukele, the government will give every adult citizen $30 in bitcoin, provided they download and register the government’s cryptocurrency app, known as Chivo.
The 39-year-old Bukele, who is also a right-wing populist, rose to power in 2019. Since then, he has initiated drastic changes in the small country. He announced plans to start using bitcoin in June. Late Monday (yesterday), he made another announcement via a televised speech, which was also streamed on YouTube, that the digital currency becomes legal from today (Tuesday).
El Salvador’s official currency is the U.S. dollar.
In his reaction to the fears expressed by some people and financial experts, particularly regarding the future of wages and pensions in bitcoin, President Bukele explained that Salvadorans will still have access to dollars.
Matt Novak, a Gizmodo reporter, questions whether or not El Salvador’s experiment with bitcoin will work. In response to that, he adds that “Only time will tell. But with bitcoin’s wild volatility it’s hard to see how the economy won’t get absolutely crushed when bitcoin’s price plunges.”