El Salvador declared BTC as Legal Currency

El Salvador is the first country to declare BTC as their regular currency. They made BTC their legal currency on 2nd September 2021. The government launched Chivo a digital wallet app that will the allow the citizens of el Salvador to conduct transactions. Following this news the BTC price fell as much as 10% which was something not expected. The El Salvador initially bought 400 BTC and later on bought 150 more BTC when the value of BTC crashed.

A woman buys in a store that accepts bitcoins in El Zonte, La Libertad, El Salvador on September 4, 2021.MARVIN RECINOS/AFP VIA GETTY IMAGES

The country announced 30$ in the form of BTC to every citizen in order to normalize the usage of BTC around the country. This caused some snags as the official app for it “Chivo” was temporarily brought offline in order to increase the capacity. The peoples rushed for singing up on the app in order get the 30$ which eventually caused the servers exhausted.

McDonald and Pizza Hut has also announced to accept bitcoin in El Salvador only. You can see below a video in which BTC is being accepted as payment.

In June 2021 El Salvador passed legislation to declare BTC as legal tender and business have to accept this payment method. The tax contribution can also be paid via BTC and exchanges of cryptocurrency will not be subject to capital gains tax. Now US and BTC are the official currency of El Salvador. It is pertinent to mention here that El Salvador is one of the poorest countries in the region and only time will tell that adopting BTC as their legal tender was a good decision or not.
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