El Salvador bought its first 400 bitcoins on Monday, and President Nayib Bukele pledged to buy "a lot more" ahead of adopting the cryptocurrency as legal tender.
Why it matters: El Salvador will become on Tuesday the first country to formally adopt bitcoin — marking the "biggest test" the digital currency has faced in its 12-year history, per Bloomberg.
El Salvador has just bought it’s first 200 coins.
— Nayib Bukele 🇸🇻 (@nayibbukele) September 6, 2021
Our brokers will be buying a lot more as the deadline approaches.#BitcoinDay #BTC🇸🇻
By the numbers: 200 bitcoins had a market value of about $10 million as of Monday night, bitcoin.com notes.
The big picture: El Salvador's legislature voted in June to make bitcoin legal tender.
- The digital currency will be used alongside the U.S. dollar, the nation's official currency.
Of note: The World Bank in June rejected the government of El Salvador's request to help the government implement bitcoin, citing environmental and transparency concerns.
How it works: The government will provide a bitcoin wallet, called Chivo, which will be pre-loaded with $30 in digital currency for users who've registered with a Salvadoran national ID number.
- "Businesses will be required to accept the digital coin in exchange for goods and services and the government will accept it for tax payments," Bloomberg notes.
What to watch: "Crypto is sexy but untested and complicated especially for a country like El Salvador,” Stifel Nicolaus & Co. managing director Nathalie Marshik told Bloomberg.
- "It’s extremely risky, and there is the question of, is the Bandesal fund big enough? The regulations look like the law, put together really quickly. It’s a big question mark."
Go deeper: El Salvador moves into bitcoin
