Enthusiasts call for the massive purchase of bitcoins 0:50
San Salvador, El Salvador (CNN Business) -
El Salvador is about to become the first country in the world to adopt bitcoin as legal tender.
President Nayib Bukele announced Monday night that his government has bought another 200 bitcoins before El Salvador's formal adoption of the currency.
El Salvador now has 400 bitcoins, which are worth nearly $ 21 million at current trade levels.
The price per bitcoin was about $ 52,486, up 1.5% in the last 24 hours, according to Coinbase.
Bitcoin price rises above $ 50,000 0:56
Starting Tuesday, bitcoin will be used as legal tender in El Salvador alongside the US dollar.
Bukele tweeted that the country's brokers "will buy a lot more as the deadline approaches."
The law that designates bitcoin as legal tender says that all "economic agents" will accept cryptocurrency as a form of payment.
It also says that tax payments can be made in bitcoin.
Nayib Bukele and her laser eyes in support of bitcoin on Twitter
Salvadorans will also be able to download the "Chivo Wallet," an application created by the government that will deliver US $ 30 in bitcoins to people to promote their use.
advertising
"The #Bitcoin process in El Salvador has a learning curve. Every step into the future is like this, and we will not achieve it all in one day, not one month," Bukele tweeted.
"But we must break the paradigms of the past."
Bukele, a right-wing populist who came to power in 2019, announced the plan to start using bitcoin in June.
He said at the time that El Salvador partnered with digital finance company Strike to establish the logistics of the decision.
Free Bitcoins to incentivize their use 2:49
Strike CEO Jack Mallers said at the time that more than 70% of El Salvador's "workforce" did not have a bank account.
Adopting bitcoin in El Salvador can cause legal and economic problems, says IMF
"They asked me to help them write a plan and that they saw bitcoin as a world class currency and that we needed to put together a bitcoin plan to help these people," he added.
Cryptocurrencies are kept in digital wallets, rather than through a traditional bank account, which means that people in poorer communities with less access to banks could use bitcoin as a way to gain greater access to their finances. .
However, social organizations have asked the Salvadoran government to repeal the law, largely because they fear the volatility of the cryptocurrency.
While the price of bitcoin has recently trebled back toward the all-time high of nearly $ 65,000 it hit in April, it suffered a dramatic drop earlier this summer, when it lost more than half its value.
This small beach is a pioneer in the use of bitcoin 3:14
Other lower volume traded cryptocurrencies are even more volatile, going up and down like seesaws, often based on speculation or meme tweets from Tesla CEO Elon Musk.
Do you want to buy bitcoin?
We explain how to invest in cryptocurrencies
The government of El Salvador is betting that by using bitcoin as legal tender, new investments can be attracted.
The authorities also hope to reduce the commissions paid for sending remittances from abroad.
According to the Central Reserve Bank of El Salvador, last year the country received remittances worth just over US $ 5.9 million.
Joshua Berlinger and Jill Disis contributed to this report.
Bitcoin