El Salvador became the first country in the world to adopt it on Tuesday bitcoin as a legal currency and as they claim will reduce supply costs by billionsmillions dollars sent abroad. But critics warned it could fuel money laundering.
Led by the young, charismatic and popular President Nayib Bukele, the plan aims to allow Salvadoran savings of $ 400 million a year in remittance commissions, mostly from the United States.
Last year alone, remittances to El Salvador totaled nearly $ 6 billion, or 23% of its gross domestic product, one of the highest in the world.
Opinion polls suggest Salvadorians are wary of both bitcoin use and cryptocurrency volatility, which critics say could increase regulatory and financial risks for financial institutions. However, some residents are optimistic.
El Zonte is part of the so-called Bitcoin Beach which aims to make the city one of the first bitcoin economies in the world.
Ahead of its launch, the government has already installed Chivo digital wallet ATMs that will allow conversion of the dollar-denominated cryptocurrency and its fee-free withdrawal, but Bukele on Monday made sure to temper public expectations for a quick Results and asked citizens to be patient.
On Monday, El Salvador bought the first 400 cryptocurrencies, temporarily pushing the price of bitcoin 1,49% higher (the exchange rate reached $52.680). The cold currency they are characteristically unstable. This spring, its price topped $64,000 in April and fell to nearly $30,000 in May.
Analysts fear that the move to legalize bitcoin alongside the US dollar could blur the prospect of El Salvador trying to seek a more than $ 1 billion financing deal with the International Monetary Fund (IMF).
After Bukele's bitcoin law was passed, Moody's downgraded El Salvador's credit rating, and the country's dollar-denominated bonds came under pressure.
