El Salvador approves $150 million trust fund to support bitcoin ambitions

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The finance commission of El Salvador’s Legislative Assembly has approved a $150 million trust fund to support the country’s plan to make bitcoin legal tender.

That amount could be further increased, according to a report in El Salvador’s Diario de Hoy newspaper.

The Central American country became the first in the world to make bitcoin legal tender in June, via a law set to take effect on September 7. On the same day, El Salvador will launch a wallet called Chivo that supports transactions in U.S. dollars — the country’s national currency — as well as bitcoin. The government first announced the planned trust in June as a way to help with converting between the two currencies.

According to an announcement from El Salvador’s Legislative Assembly, the fund will aid in rolling out the $30 bitcoin bonus that citizens will receive when they sign up for Chivo, which supports the conversion of cryptocurrency to dollars. El Salvador’s president Nayib Bukele has underscored that citizens will have a choice about whether to download the app, although the $30 bonus will only be offered in bitcoin. In addition, the government is also setting up 200 ATMs to support bitcoin transactions.

El Salvador estimates it has 50,000 bitcoin users today and expects to increase that number to 4 million, according to that announcement. It is unclear if that number would include only active cryptocurrency users, or anyone that would sign up for the Chivo wallet. 

Despite strong support from bitcoin enthusiasts and Bukele’s fans, the plan has also met opposition from groups protesting the measure in the streets and online using Twitter tags like #nadiequierebitcoin ("nobody wants bitcoin") and #noalbitcoin ("no to bitcoin"). 

Some people protesting include the retired, veterans and workers said to be worried about the possibility that their pensions could be paid out in bitcoin, although the government has clarified that U.S. dollars will still be used to pay salaries, pensions and set prices. The volatility of bitcoin appears to be a fundamental concern. 

Certain unions and trade groups have also opposed aspects of the bitcoin plan, including the Salvadoran Association of International Freight Carriers (ASTIC). According to a report from the Telesur television network, this group is calling on lawmakers to modify an article in the law that requires companies to accept bitcoin as payment.

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