In Brief:
- The Trust that will serve for the convertibility of Bitcoin to dollars.
- Congress approved the fund With 64 votes in favor and 14 votes against.
The Assembly of El Salvador approved a law to create a $150 million fund. The fund will be used to convert Bitcoin to USD before the country’s plan to adopt cryptocurrency as legal tender next week.
The fund had 64 votes in favor and 14 against it for its approval. Initially, the fund will be $ 150 million with the possibility of increasing it, said the Minister of Economy, María Luisa Hayém Brevé.
“We have several teams in the territory to show the population how to use the Chivo Wallet. We have developed a friendly application so that all Salvadorans can learn to use this cryptocurrency ”, explained the official.
The Development Bank of El Salvador will administer the fund in order to support the transactions.
“The purpose of this law is to financially support the alternatives that the state provides, without prejudice to private initiatives, that allow the user to carry out the automatic and instantaneous convertibility of bitcoin to the United States dollar,” a congressional document said.
Congress also agreed to reform the General State Budget of 2021. They will redirect $ 500 million from a loan with the Central American Bank for Economic Integration. Out of these funds, $ 150 million will go to Bandesal for the Bitcoin Trust. Another $ 53.3 million for the execution of the plan, of which $ 23.3 million are for the “Cryptofriendly”.
Another $ 30 million is for the digital wallet called “Chivo”. The rest of the funds are for different State institutions, including $ 20 million for Bandesal to pay the temporary subsidy for the increase in the minimum wage to Micro, Small and Medium Enterprises.
In June, El Salvador passed the bill that treated bitcoin as a legal tender along with the US dollar. The bill goes into effect on September 7. Though president Nayib Bukele clarified last week that using bitcoin in the country is not compulsory.
