The Congress of El Salvador has voted unanimously to approve a $150 million fund that will allow for bitcoin to fiat conversions in the country.
El Salvador Is Really Pushing BTC Forward
El Salvador is the first country to declare bitcoin legal tender. The country will permit bitcoin transactions for goods and services as though bitcoin was fiat currency beginning on September 7, though the journey has come with a few ups and downs, the first one arguably being that El Salvador is the first nation to take this step.
This is a strength and a weakness in the sense that if El Salvador can move in the right direction and impose the right regulations that allow for quick and easy transactions for digital currency enthusiasts, there will likely be several other countries knocking on its door wanting to understand how they can do the same thing. Bitcoin seems to be more popular than ever, and several individuals are interested in utilizing the cryptocurrency for its initial purpose, which is as a payment tool that can push checks, fiat, and credit cards aside.
However, there is also a chance that El Salvador will fail or experience extreme difficulty in implementing the right protocols that will permit a bitcoin-run society. After all, the asset is one of the most volatile in the world, with the currency having recently dropped nearly $20,000 from its all-time high of approximately $64,000 in mid-April. Since then, the currency has been trapped in a bear pattern, and while there have been hints it can get out, things have not moved fully north just yet.
With all this in mind, many believe El Salvador is making a big mistake in permitting bitcoin to be used in ways similar with fiat currencies. Still, the Central American nation is moving forward in its plans and appears hellbent on permitting bitcoin transactions for all who wish to engage. Despite heavy protests from the people – many of whom declare that the volatility and illicit monetary behavior tied to bitcoin will cause serious issues down the line – the country has declared its agenda and is working hard to make it a reality.
The conversion fund easily passed with a vote of 64 in favor and 14 against. The money will be used to ensure conversions between bitcoin and the U.S. dollar – which is what the country primarily operates on – can occur with ease. Money for the fund will also be taken from the finance ministry’s current budget and handed out accordingly by the country’s central bank.
Making Sure the Process Is Quick and Steady
A congressional document reads:
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.