The Legislative Assembly of El Salvador has passed legislation to create a $150 million bitcoin trust fund and support the development of crypto infrastructure and services across the country.
The bill was passed on August 31. 64 officials voted in favor and 14 opposed the establishment of a trust fund. The trust aims to facilitate the conversion of Bitcoins to U.S. dollars and support the launch of important technical infrastructure to achieve widespread adoption of encrypted assets.
The news was released a week before the controversy in this country Bitcoin Law Set to take effect. The upcoming legislation will recognize BTC as the legal tender of the entire El Salvador and will take effect on September 7. Currently, the U.S. dollar is used as legal tender in the country.
The El Salvador Development Bank (Bandesal) has been appointed to oversee the operation of the trust
US$150 million will be allocated from the country’s US$500 million loan to the Central American Bank for Economic Integration (CABEI). The CABEI loan was originally for the economic recovery of SMEs.
Of these funds, $23.3 million is dedicated to supporting the installation of government-supported crypto ATMs-allowing local citizens to exchange bitcoins and U.S. dollars. US$30 million was also designated to provide incentives to encourage the adoption of Chivo, the government’s digital wallet.
In June, President Nayib Bukele announced that the government would Airdrop of $30 worth of Bitcoin For every Salvadoran adult who downloads the Chivo wallet. However, the current population of El Salvador is 6.5 million, which indicates that the government either believes that the adoption rate will decrease or that it has not allocated enough Bitcoin to circulate.
In related new asset tokenization and financial infrastructure company Koibanx Announce It has signed an agreement with the government of El Salvador to develop the country’s digital currency infrastructure with Algorand’s open source blockchain as the core.
El Salvador’s Bitcoin law has been opposed by some Serious criticism and suspicion From international organizations and national citizens.
Economy Minister María Luisa Hayém Brevé stated that the government focuses on cryptocurrency education and uses cryptographic incentives to alleviate the high level of uncertainty in its population.