El Salvador has begun the installation of Bitcoin ATMs, which will allow its citizens to convert the cryptocurrency into U.S. dollars and withdraw it in cash, as part of the government’s plan to make the digital coin a legal tender.
The government will install 200 of the teller machines to initially accompany its digital wallet called Chivo, a local slang term for ‘cool,’ President Nayib Bukele said on Twitter.
He added that transactions will be commission-free, saying that there will also be 50 financial branches across the country for withdrawing or depositing money. Adopting Bitcoin is expected to save the citizens $400 million per year in fees for receiving remittances from abroad.
El Salvador’s Bitcoin law is expected to take into effect on September 7 and the citizens will be able to download the government’s Chivo digital wallet, enter their ID number and receive $30 in Bitcoin. The government has created a $150 million fund to back Bitcoin to U.S. dollar conversions, Finance Minister Alejandro Zelaya said in a local TV interview on Monday
However, the use of bitcoin as legal tender will not be mandatory. Echoing the finance minister, Alejandro Zelaya, who said the same thing last week, Nayib Bukele said the government would not force any of the nation’s residents to receive bitcoin as a form of payment.
“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,” President Nayib Bukele wrote.
Bitcoin Performance Amidst El Salvador’s Plans
Bitcoin hit $50,000 on Sunday reaching a more than 3-month high, as the cryptocurrency continues to rebound. The digital coin rose above that level around 10:40 p.m. ET on Sunday, according to data from Coin Metrics.
Currently, the cryptocurrency is exchanging hands at $49,613.34 as of 1.00 P.M East African Time.
The digital coin has been receiving immense support. Last week, Coinbase said it would buy $500 million in crypto on its balance sheet and allocate 10% of profits into a crypto assets portfolio.
Analysts are now watching out for the performance of the digital asset ahead of El Salvador’s plans to make it a legal tender.