El Salvador Buys Its First 200 BTC a Day Before Its Bitcoin Law Becomes Effective

And it “will be buying a lot more.”

Sep 6, 2021 at 9:08 p.m. UTC
Updated Sep 7, 2021 at 6:05 p.m. UTC

El Salvador President Nayib Bukele announced on Twitter his government bought 200 BTC on Monday, a day before the country’s Bitcoin Law, which will make the cryptocurrency legal tender within the Central American nation, goes into effect.

“El Salvador has just bought it’s (sic) first 200 coins,” he wrote. “Our brokers will be buying a lot more as the deadline approaches. #BitcoinDay #BTC” On Monday at 15:15 UTC, Bukele tweeted that El Salvador had purchased 150 additional bitcoins following its recent price drop, bringing its total holdings to 550 BTC.

Prior to Bukele’s initial tweet there had been a growing number of users on social media platforms, including Twitter and Reddit, calling for people to buy small amounts of bitcoin in support of El Salvador’s plan to make bitcoin legal tender, Bloomberg reported. Many investors are betting the news could give the oldest cryptocurrency a price boost.

In June, Bukele announced the Bitcoin Law would go into effect on Sept. 7. His government will use the Chivo e-wallet, preloaded with US$30 of bitcoin for everyone who downloads it.

El Salvador’s government has also been working on building infrastructure to support the new Bitcoin Law, including creating a $150 million bitcoin trust to facilitate exchange between bitcoin and U.S. dollars in the country.

The law was passed by a supermajority in El Salvador’s legislature, with 62 members voting in favor of the bill, 19 opposed and three abstained.

However, in contrast to the original law, Bukele on Aug. 23 confirmed that the use of bitcoin as legal tender will not be mandatory.

“If someone wants to continue to carry cash, not receive a sign-on bonus, not win over customers who have bitcoin, not grow their business and pay commission on remittances, they can continue to do so,” Bukele tweeted at the time.

UPDATE (Sept. 7, 18:03 UTC): Updated with details about El Salvador’s additional purchase of bitcoin in the second paragraph.

DISCLOSURE

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Muyao is a reporter on the markets team. She is based in Brooklyn, New York. She holds less than one BTC.